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Match each event in the process of accounting for manufacturing overhead with the appropriate entry. A. Actual overhead is incurred B. Overhead is applied to work in process C. The period ends 1. Manufacturing Overhead is credited 2. Manufacturing overhead is closed 3. Manufacturing Overhead is debited.
A.--3 B.--1 C.--2
All manufacturing costs are assigned to units of product and all non manufacturing costs are treated as period costs under ________ costing
Absorption
What is the most common approach to product costing throughout the world?
Absorption costing
Which of the following would not be a good allocation base for manufacturing overhead?
Accounting hours
When a company creates overhead rates based on the actions it performs, it is employing an approach called _________________-________________ costing.
Activity Based
A measure such as direct labor hours or machine hours used to assign overhead costs to produce services is called a cost or a
Activity base - also commonly called an allocating base
Select all that apply Which of the following costs are charged directly to the income statement?
Administrative costs Selling costs
Select all that apply Which methods can be used to dispose of underapplied or overapplied manufacturing overhead? Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold Make a direct adjustment to Cost of Goods Sold Close it out to Work in process Allocate it to Raw Materials, Work in Process, and Finished Goods Make a direct adjustment to Finished Goods
Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold Make a direct adjustment to Cost of Goods Sold
What methods can be used to dispose of underapplied or overapplied manufacturing overhead?
Allocate it to Work in process, Finished goods, and Cost of goods sold. Close it to Cost of goods sold.
Applied manufacturing overhead is entered on what side of the Manufacturing overhead account?
Always the credit side
Applied manufacturing overhead is entered on what side of the Manufacturing overhead account?
Always the credit side (Recording applied overhead is not dependent on whether overhead is overapplied or underapplied.)
Why do companies use a predetermined overhead rate rather than an actual overhead rate?
An actual overhead rate is not known until the end of the period.
Which of the following companies would be most likely to use operations costing? A custom home builder A dog food manufacturer An automobile manufacturer A law firm
An automobile manufacturer
The basic formula for process costing is
Average unit cost = total manufacturing cost/ total units produced.
Which of the following are used to calculate Cost of goods available for sale on the schedule of cost of goods sold? check all that apply A. Cost of goods sold B. Beginning finished goods inventory C. Cost of goods manufactured D. Ending finished goods inventory
B. Beginning finished goods inventory C. Cost of goods manufactured. ***Ending finished goods inventory would be subtracted from goods available for sale to obtain cost of goods sold.
A journal entry debiting Cost of goods sold and crediting Finished goods is made when A. the period is completed B. Goods are sold C. Goods are started D. Goods are finished
B. Goods are sold
Gemini had sales of $50,000, Unadjusted cost of goods sold of $23,000, overapplied manufacturing overhead of $3,000 and selling and administrative expenses of $25,000. Gross profit is
Because manufacturing overhead is overapplied, it reduces cost of goods sold to $20,000 ($23,000-$3,000). Thus the gross profit is $50,000 - $20,000 or $30,000.
When is predetermined overhead rate calculated?
Before the period begins
When is the predetermined overhead rate calculated?
Before the period begins
Cost of Direct Materials (formula)
Beginning Inventory + Purchases - Indirect Materials - Ending Inventory = Cost of Direct Materials
Which of the following items are included on a cost of goods manufactured report?
Beginning and ending raw materials inventory Applied manufacturing overhead Beginning and ending work in process inventory
Unadjusted cost of goods sold (formula)
Beginning finished goods inventory + COG manufactured - ending finished goods = Unadjusted cost of goods sold
The predetermined overhead rate per direct labor dollars for a particular department
Can by calculated by dividing Estimated manu overhead by estimated direct labor cost
Select all that apply What methods can be used to dispose of underapplied or overapplied manufacturing overhead?
Close it to Cost of goods sold. Allocate it to Work in process, Finished goods, and Cost of goods sold.
Which of the statements regarding closing out over or underapplied overhead is correct?
Closing to Cost of goods sold is simpler, and allocating is more accurate.
Which of the statements regarding closing out over or underapplied overhead is correct? Closing to Cost of goods sold is simpler, and allocating is more accurate. Both methods are equally accurate. Both methods are equally simple. Allocating is simpler, and closing to Cost of goods sold is more accurate.
Closing to Cost of goods sold is simpler, and allocating is more accurate.
Typical cost drivers include (check all that apply) Computer Time Machine hours flight hours machine depreciation utilities cost
Computer time machine hours flight hours
A factor that causes overhead costs is called a
Cost Driver - measure such as direct labor hours or machine hours used to assign overhead costs to product
Milton Corporation sold goods costing $50,000 for $75,000. Journal entries to be made could include entries debiting:
Cost of Goods Sold for $50,000 and Accounts Recievable for $75,000
What accounts are debited when goods are sold on account?
Cost of good sold and Accounts Receivable
Cost of goods available for sale (formula)
Cost of goods manufactured + Beginning Finished good inventory = COG's available for sale
What two accounts are involved when underapplied or overapplied overhead is closed out using the simpler method?
Cost of goods sold and Manufacturing overhead
Underapplied or overapplied 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 overapplied or underapplied overhead includes entries to:
Cost of goods sold, Finished goods, Work in process, Manufacturing overhead
The journal entry to record the purchase of materials credits:
Credit Accounts Payable
Place these items in the order in which they appear on the schedule of cost of goods sold A. Unadjusted cost of goods sold B. Deduct: Finished goods inventory, ending C. cost of goods available for sale D. Finished goods inventory, beginning E. Add: Cost of goods manufactured
D. Finished goods inventory, beginning E. Add: Cost of goods manufactured C. Cost of goods available for sale B. Deduct: Finished goods inventory, ending A. Unadjusted cost of goods sold
Total manufacturing costs (formula):
DM + DL + MOH(applied)
A total of $10,000 manufacturing was applied to Job #40. The journal entry to record this entry would be:
Debit Work in Process $10,000 and Credit Manufacturing Overheard $10,000
What account is debited for the issuance of direct materials into production? Accounts payable manufacturing overheard work in process raw materials
Debit Work in process
The journal entry to record depreciation on office equipment debits ______.
Depreciation Expense and credits Accumulated Depreciation
Labor costa that are easily traced to a job are called _____ labor costs
Direct Labor Cost
Put the steps for calculating direct materials on the schedule of cost of goods manufactured in order A. Deduct: Indirect materials included in manufacturing overhead B. Raw materials used in production C. Deduct: Raw materials inventory, ending D. Add: purchases of raw materials E. Raw materials inventory, beginning F. Total raw materials available
E. Raw materials inventory, ending D. Add: Purchases of raw materials F. Total raw materials available C. Deduct: Raw materials inventory, ending B. Raw materials used in production A. Deduct: Indirect materials included in manufacturing overhead
The formula for a predetermined overhead rate is:
Estimated manufacturing overhead cost divided by estimated allocation base
Overhead allocated to a job that used 300 direct labor hours is
Estimated manufacturing overhead/estimated direct labor hours = direct labor hours ($) X direct labor hours used = #
Which of the following costs are classified as manufacturing overhead? Assembly wages Marketing costs Factory rent Factory utilities Factory maintenance wages
Factory rent Factory utilities Factory maintenance wages
The following costs would be classified as MOH:
Factory utilities, Factory maintenance wages, Factory rent
The cost of each individual unit is tracked to products under both job order and process costing.
False
True or false: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour.
False
True or false: At the end of the accounting period, a balance in the Manufacturing Overhead account always means that overhead was underapplied. True False
False
True or false: Job-order costing can only be used in manufacturing firms.
False
True or false: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process.
False
True or false: The cost of each individual unit is tracked to products under both job order and process costing.
False
True or False: Job order costing can only be used in manufactering firms
False (Also used extensively in service industries.)
When a job is completed, its costs are transferred into ______.
Finished Goods
When a job is completed, which account is debited?
Finished Goods Inventory
When a job is completed, its costs are transferred into: Cost of goods sold Finished goods Raw materials Work in process
Finished goods
When a job is completed, which account is debited?
Finished goods
Himber, Inc. just completed a job that cost $14,000 in direct materials, $12,000 in direct labor, and $8,000 in applied manufacturing overhead. The journal entry to record completion of the job would debit:
Finished goods $34,000 and credit Work in process $34,000
Carlisle, Inc. had sales revenue of $500,000, unadjusted cost of goods sold of $395,000, underpaid manufacturing overhead of $5,000 and selling and administrative expenses of $50,000. Calculate gross profit.
Gross profit = $500,000 - ($395,000 + $5,000) = $100,000
The journal entry to record a cash payment of $400 for insurance on administrative office equipment debits _____ and credits cash.
Insurance expense
A journal entry that debits Work in Process and MOH and credits Raw Materials records the:
Issuance of materials
Companies that make many different types of products each period use
Job order costing
Which account is credited when MOH is applied?
MOH
The Journal entry to record depreciation on factory equipment debits:
MOH and credits Accumulated depreciation
The journal entry to record accrued property taxes for a factory building debits:
MOH and credits Property taxes payable
Which methods can be used to dispose of underapplied or overapplied manufacturing overhead?
Make a direct adjustment to Cost of Goods Sold Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold
What is the most common method for disposing of the balance in Manufacturing Overhead?
Making a direct adjustment to Cost of Goods Sold
Cost of goods *blank* is the total cost of jobs completed during the period
Manufactured
Which account is credited when manufacturing overhead is applied?
Manufacturing overhead
George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.
Manufacturing overhead $1,000 and credits Property taxes payable $1,000
The journal entry to record accrued property taxes for a factory building debits ______.
Manufacturing overhead and credits Property taxes payable
Actual overhead costs may not be proportional to the actual amount of the allocation base used because:
Many actual overhead costs are fixed OR overhead spending may not be under control
Direct Materials costs are recorded on the job cost sheet when the
Materials are issued to the job
What document specifies the type and quantity of direct materials used on a specific job?
Materials requisition form
What document specifies the type and quantity of direct materials used on a specific job? Direct labor time ticket Materials requisition form Bill of materials form Job cost sheet
Materials requisition form
What document specifies the type and quantity of direct materials used on a specific job? Job cost sheet Direct labor time ticket Materials requisition form Bill of materials form
Materials requisition form
The overhead applied to Job ABC using multiple predetermined overhead rate is $
Multiply departmenta A & B's predeterminded overhead rate per direct labor hours X's the direct labor hours worked on job ABC. Then add them up together
Which of the following would most likely NOT be classified as a direct material? Nails and screws Laptop keyboard Drywall Automobile engine
Nails and screws
Net operating income (formula)
Net Op Inc = Gross Margin - SG & A
Which of the following would NOT be charged to the Manufacturing overhead account? Factory rent Supervisor's salary Depreciation on factory equipment Nonmanufacturing costs
Nonmanufacturing costs
Which of the following would not be charged to the Manufacturing overhead account?
Nonmanufacturing costs
When all overhead is assigned using direct labor hours, the company has chosen to use a ________ predetermined overhead rate
Plantwide rate - a single predetermined overhead rate is called
The formula for applying overhead to a specific job is
Predetermined overhead rate X Amount of allocation base incurred by job
What is the formula for applying overhead to a specific job?
Predetermined overhead rate × the actual cost driver usage for the specific job
What is the formula for applying overhead to a specific job? Estimated manufacturing overhead / estimated total cost driver usage Actual manufacturing overhead rate × actual cost driver usage for the specific job Predetermined overhead rate × the actual cost driver usage for the specific job Estimated manufacturing overhead / cost driver usage for the specific job
Predetermined overhead rate × the actual cost driver usage for the specific job
The entry to record issuing materials to be used in productions credits:
Raw Materials
The journal entry to record placing materials into production credits ______.
Raw Materials
The journal entry to record the purchase of materials debits ______.
Raw Materials Inventory
A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit ______.
Raw Materials Inventory $70,000 and credit Accounts Payable $70,000
The journal entry to record issuing material to be used in production credits:
Raw materials
The journal entry to record issuing materials to be used in production credits ______.
Raw materials
The journal entry to record issuing materials to be used in production credits:
Raw materials
Select all that apply Which of the following statements are true?
Raw materials inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw materials inventory account.
Select all that apply Which of the following statements are true? Direct labor costs flow through the Raw materials inventory account. Raw materials inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw materials inventory account. Raw materials inventory only includes the cost of direct materials.
Raw materials inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw materials inventory account.
Which of the following statements are true? check all that apply Raw materials only include the cost of direct materials Raw materials used in production are transferred to Work in process as direct materials When materials are purchased they are recorded in the Raw Materials inventory account. Direct labor costs flow through the Raw materials inventory account.
Raw materials used in production are transferred to Work in process as direct materials. When materials are purchased they are recorded in the Raw materials inventory account.
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000
Reason: Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000. Adjust for work in process when calculating the cost of goods manufactured.
A journal entry that debits MOH and credits Property taxes payable records the:
Recognition of accrued property taxes
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Which of the following is not a manufacturing cost category? Selling & administrative costs Direct labor Manufacturing overhead Direct materials
Selling & administrative costs
Which of the following is not a manufacturing cost category
Selling and administrative costs
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
Which of the following would NOT be part of direct labor cost? Supervisor salaries Attorney salaries Plumber wages Assembly-workers wages
Supervisor salaries
True or False: One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors
TRUE
Which of the following would not be considered a direct labor cost in a service firm that uses job - order costing
The salary of the manager at a hair salon
Which of the following would not be considered a job in a service firm that uses job-order costing?
The tax department in an accounting firm
Jones company uses a job order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for job #420 listed 4,000 in direct materials cost and 5000 in direct labor cost to manufacture 7500 units. The unit cost of job #420 is
Total cost of Job #420 = Direct Materials + Direct Labor + Predetermined overhead rate x Direct labor cost = $4,000 + $5,000 + 120% x $5,000 = $15,000 Unit product cost = $15,000/$7,500 = $2.00 per unit
Smith Inc uses a job order costing system 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 $
Total cost of Job #42A = Direct materials + direct labor + predetermined overhead rate X actual machine-hours = $18,000 + $12,000 + ($12 per machine-hour X 1,100 machine-hours) = $43,200
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $10,000; Manufacturing overhead applied: $120,000; BWIP: $30,000; EWIP: $12,000
Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000
T/F - Underapplied or overapplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels.
True
True or false: The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next.
True
Which of the following statements are true?
When materials are purchased they are recorded in the Raw materials inventory account. Raw materials inventory represents the cost of materials not yet used in production.
MOH is applied with a debit to:
Work in Process
When a job is completed, its costs are transferred out of ______.
Work in Process
MOH is applied with a debit to:
Work in process
Manufacturing overhead is applied with a debit to ______.
Work in process
The journal entry to record the issuance of direct materials into production debits:
Work in process
When a job is completed, which account is credited?
Work in process
The journal entry to record $10,000 in manufacturing overhead applied to job #40 debits:
Work in process $10,000 and credits MOH $10,000
The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ______.
Work in process $10,000 and credits Manufacturing overhead $10,000
A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit:
Work in process $40,000, debit MOH $30,000 and credit Raw materials $70,000
A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit ______.
Work in process $40,000, debit Manufacturing overhead $30,000 and credit Raw materials $70,000
The journal entry to record issuing both direct and indirect materials into production debits:
Work in process and MOH
The journal entry to record issuing both direct and indirect materials into production debits ______.
Work in process and Manufacturing overhead
What accounts are debited in a journal entry that records putting both direct and indirect materials into production?
Work in process and Manufacturing overhead
In the formula Y = A + BX, X represents the estimated
X= Total amount of the allocation base Y = The estimated total manufacturing overhead cost A = The estimated total fixed manufacturing over head cost B = The estimated variable manufacturing overhead cost per unit of the allocation base
Cost plus pricing occurs when
a markup percentage is added to the cost of a job
Cost-plus pricing occurs when ______.
a markup percentage is added to the cost of a job
A cost driver is ____
a measure that explains or influences the amount of manufacturing overhead cost incurred
A cost driver is ______.
a measure that explains or influences the amount of manufacturing overhead cost incurred
A cost driver is ______. the rate that is used to apply manufacturing overhead to products and services the total estimated manufacturing overhead cost a measure that explains or influences the amount of manufacturing overhead cost incurred another name for predetermined overhead rate
a measure that explains or influences the amount of manufacturing overhead cost incurred
A cost driver is ______. the rate that is used to apply manufacturing overhead to products and services the total estimated manufacturing overhead cost another name for predetermined overhead rate a measure that explains or influences the amount of manufacturing overhead cost incurred
a measure that explains or influences the amount of manufacturing overhead cost incurred
A normal cost system assigns overhead to jobs using:
a predeterminded overhead rate
A normal cost system assigns overhead to jobs using ______.
a predetermined overhead rate
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under costing
absorption
Which of the following would not be a good allocation base for manufacturing overhead? accounting direct labor hours units of products machine hours
accounting hours
Which of the following would not be a good allocation base for manufacturing overhead
accounting hours are not related to manufacturing
The journal entry to record the purchase of materials credits ______
accounts payable
The journal entry to record the purchase of materials credits ______.
accounts payable
the journal entry to record the purchase of materials credits:
accounts payable
The MOH account is debited when:
actual OH costs are incurred
As jobs are worked on the Work in Process account accumulates ______.
actual direct materials and direct labor costs and applied overhead costs
As jobs are worked on the Work in Process account accumulates ______. actual direct materials and applied direct labor and overhead costs actual direct materials, direct labor, and overhead costs actual direct materials and direct labor costs and applied overhead costs estimated direct materials and direct labor and applied overhead costs
actual direct materials and direct labor costs and applied overhead costs
The work in process account accumulates ______.
actual direct materials, actual direct labor, and applied overhead costs
The work in process account accumulates ______. actual direct materials, actual direct labor, and applied overhead costs actual direct material, applied direct labor, and applied overhead costs applied direct material, applied direct labor, and actual overhead costs actual direct materials, actual direct labor, and actual overhead costs
actual direct materials, actual direct labor, and applied overhead costs
The work in progress account accumulates:
actual direct materials, actual direct labor, and applied overhead costs
The Manufacturing Overhead account is debited when ______
actual overhead costs are incurred
The Manufacturing Overhead account is debited when ______.
actual overhead costs are incurred
Overhead is overapplied if ______.
actual overhead is less than applied overhead
Overhead is overapplied if ______. actual overhead is more than applied overhead actual overhead is less than applied overhead cost of goods manufactured is less than cost of goods sold adjusted cost of goods sold is more than unadjusted cost of goods sold
actual overhead is less than applied overhead
Overhead is underapplied if ______.
actual overhead is more than applied overhead
Overhead is underapplied if ______. actual overhead is more than applied overhead actual overhead is less than applied overhead cost of goods manufactured is less than cost of goods sold adjusted cost of goods sold is less than unadjusted cost of goods sold
actual overhead is more than applied overhead
To calculate total current manufacturing costs on the Cost of Goods Manufactured report:
add direct materials, direct labor, and applied manufacturing overhead
To calculate the adjusted cost of goods sold:
add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold
Select all that apply At the end of the reporting period, any differences between actual and applied manufacturing overhead may be ______. reported on the income statement as a gain or loss ignored if the amount is insignificant adjusted directly to Cost of Goods Sold (COGS) adjusted to Work in Process, Finished Goods, and COGS
adjusted directly to Cost of Goods Sold (COGS) adjusted to Work in Process, Finished Goods, and COGS
The most common method for disposing of the balance in Manufacturing Overhead is ______. allocating it between Work in Process and Finished Goods inventory adjusting Finished Goods inventory adjusting Cost of Goods Sold allocating it between Cost of Goods Sold and inventory accounts
adjusting Cost of Goods Sold
A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______.
administrative salaries
A journal entry debiting Salaries expense and crediting Salaries and wages payable could record _______.
administrative salaries
Manufacturing Overhead
all manufacturing costs except direct materials and direct labor - Consists of many different types of costs - is an indirect cost - contains fixed costs
Actual manufacturing overhead consists of:
all manufacturing costs other than direct labor and direct materials
The more accurate method of closing out the balance in Manufacturing overhead is ______.
allocating it among Work in process, Finished goods, and Cost of goods sold
The process used to assign overhead costs to products is called overhead
allocation
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 first step in assigning manufacturing overhead is to determine the __ __ or cost driver
allocation base
Select all that apply A direct labor time ticket includes the ______. materials used on each job worked amount of time spent on each job job numbers of jobs worked on
amount of time spent on each job job numbers of jobs worked on
The journal entry to record general selling and administrative costs is debit ______.
an expense account and credit Cash or a payable
the journal entry to record general selling and administrative costs debits:
an expense account and credit cash/ a liability
The journal entry to record general selling and administrative costs debits:
an expense account and credits Cash or a liability
The journal entry to record selling and administrative salaries debits ______.
an expense account and credits Cash or a liability
The job order costing system may inaccurately assign cost to jobs due to
an inappropriate allocation base
A journal entry that debits Work in process and credits Manufacturing overhead is recording the ______.
application of manufacturing overhead costs
A journal entry that debits work in process and credits MOH is recording
application of manufacturing overhead costs
a journal entry that debits work in process and credits manufacturing overhead is recording the
application of manufacturing overhead costs
a journal entry that debits work in process and credits manufacturing overhead is recording the:
application of manufacturing overhead costs
On the job cost sheet and work in process accounts, the ______ manufacturing overhead is recorded.
applied
the cost of goods manufactured report includes ______ manufacturing overhead costs. actual applied
applied
Select all that apply Work in Process consists of ______.
applied manufacturing overhead actual direct labor cost actual direct materials cost
Work in Process consists of ______
applied manufacturing overhead actual direct materials cost actual direct labor cost
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and ______.
applied manufacturing overhead cost
Predetermined overhead rates:
are based on some secondary allocation measure
Select all that apply Labor costs ______. are always recorded directly into Work in Process are determined from the job cost sheets are recorded in basically the same way as material costs may be direct or indirect
are recorded in basically the same way as material costs may be direct or indirect
Select all that apply Labor costs ______. are determined from the job cost sheets are always recorded directly into Work in Process are recorded in basically the same way as material costs may be direct or indirect
are recorded in basically the same way as material costs may be direct or indirect
Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______
as the costs are applied to jobs
Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______.
as the costs are applied to jobs
Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______. as they are incurred when the jobs are sold at the end of the period as the costs are applied to jobs
as the costs are applied to jobs
Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______.
as they are incurred
raw materials is an ____ account
asset
In a service firm, salaries of administrative personnel, rent and utilities, and nonbillable employee time are ______.
assigned to client or account using an allocation base
Overhead application is the process of ______
assigning manufacturing overhead cost to jobs
Bar codes can be used to ______.
automatically record and post direct labor costs to jobs
The basic formula for process costing is ______. average unit cost = total manufacturing cost/total units produced total cost = actual direct materials + actual direct labor + applied overhead average unit cost = total units produced/total manufacturing costs
average unit cost = total manufacturing cost/total units produced
when preparing financial statements in a job-order costing system, finished goods flow first to the ___ _____ and then to the ___ ____
balance sheet income statement
Predetermined overhead rates are ______. based on some secondary allocation measure generally calculated for each month of the year calculated using estimated costs and actual cost driver usage used to assign both direct and indirect manufacturing costs to jobs
based on some secondary allocation measure
Predetermined overhead rates are ______. used to assign both direct and indirect manufacturing costs to jobs based on some secondary allocation measure generally calculated for each month of the year calculated using estimated costs and actual cost driver usage
based on some secondary allocation measure
The predeterminded overhead rate is calculated
before the period begins
When is the predetermined overhead rate calculated? As soon as actual overhead is known After the period is over Before the period begins Throughout the year
before the period begins
which are used to calculate cost of goods available for sale on the schedule of cost of goods sold?
beginning finished goods inventory, cost of goods manufactured
The type and quantity of each type of direct material needed to complete a unit of product is listed on the ______.
bill of materials
Because service firms tend to be labor-intensive, the primary driver used to assign cost is
billable hours
The most common driver used to assign costs in a service firm is ______.
billable hours
Costs assigned to units of product in absorption costing include ______ manufacturing costs.
both variable and fixed manufacturing
The difference between direct labor and indirect labor is that direct labor ______.
can be easily traced to jobs, while indirect labor cannot
Allocation bases that do not driver overhead costs:
can cause product costs to be distorted
The period ends, then MOH is debited, credited or closed?
closed
The simpler method of closing out the balance of Manufacturing overhead is ______.
closing it out to Cost of goods sold
A journal entry that debits Finished goods and credits Work in process records the:
completion of a job
Manufacturing overhead costs ______.
consist of many different items are indirect costs
Finished goods ______
consists of completed, unsold goods
Finished goods ______.
consists of completed, unsold goods
Finished goods ______. consists of goods that require additional processing before being sold is the same as cost of goods manufactured consists of completed, unsold goods consists of goods that have been sold to customers during the period
consists of completed, unsold goods
Job-order costing would most likely be used in a(n) ______.
construction company
Job-order costing would most likely be used in a(n) ______. construction company dairy farm that produces raw milk soda bottling factory oil refinery
construction company
Select all that apply Materials requisition forms are used to ______. control the flow of materials from inventory into production specify the cost of materials to be ordered summarize the cost of a job record the cost of raw materials in the accounting system
control the flow of materials from inventory into production record the cost of raw materials in the accounting system
Select all that apply Materials requisition forms are used to ______. specify the cost of materials to be ordered summarize the cost of a job control the flow of materials from inventory into production record the cost of raw materials in the accounting system
control the flow of materials from inventory into production record the cost of raw materials in the accounting system
An allocation base should be ______.
cost driver
When calculating a predetermined overhead rate, the ideal allocation base should be a(n) __ __
cost driver
When calculating a predetermined overhead rate, the ideal allocation base should be a(n) ___
cost driver
The amount transferred from Work in Process to Finished Goods is ______
cost of goods manufactured
The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______.
cost of goods manufactured
The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______. gross profit net operating income cost of goods sold cost of goods manufactured
cost of goods manufactured
What is used to calculate Cost of goods available for sale on the schedule of cost of goods sold?
cost of goods manufactured and beginning finished good inventory
what accounts are debited when goods are sold on account?
cost of goods sold and accounts receivable
When goods are sold to customers, ______. costs are transferred from Finished Goods to Sales Revenue costs are transferred from Work in Process to Finished Goods the inventory accounts are not affected costs are transferred from Finished Goods to Cost of Goods Sold
costs are transferred from Finished Goods to Cost of Goods Sold
When goods are sold to customers:
costs are transferred from finished goods to cost of goods sold
what side of the manufacturing overhead account is always used to record manufacturing overhead applied to production?
credit
when overhead is underapplied, a ___ must be made to the manufacturing overhead account to close it out
credit
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 costs incurred
credit / debit
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 costs incurred.
credit; debit
Overhead is applied to Work in process, then MOH is debited, credited or closed?
credited
when overhead is applied to work in process manufacturing is :
credited
what side is always used to record the actual manufacturing costs incurred?
debit
The journal entry to record $20,000 in depreciation on factory equipment is _______.
debit MOH $20,000 and credit Accumulated Depreciation $20,000
A company spent $2000 on factory rent, $1000 on factory utilities, and $5000 on misc factory cost. The journal entry to record these transactions would be:
debit manufacturing overhead cost and credit accounts receivables
Actual manufacturing overhead costs are accumulated on the ___ side of the manufacturing overhead account and applied costs are shown on the ___ side.
debit, credit
Actual manufacturing overhead costs are accumulated on the ______ side of the Manufacturing Overhead account and applied costs are shown on the ______ side. credit, debit debit, credit
debit, credit
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
Actual manufacturing overhead is ______ to the Manufacturing overhead account.
debited
Actual overhead is incurred, then MOH is debited, credited or closed?
debited
when actual overhead is incurred manufacturing is :
debited
Actual manufacturing overhead is ______ to the Manufacturing overhead account.
debited (Applied overhead is credited to the account.)
The difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that one:
debits Depreciation expense, while the other debits MOH
The journal entry to record depreciation on office equipment
debits depreciation expenses and credits Accumulated depreciation
if overapplied overhead is closed out to Cost of Goods Sold, the Cost of Goods sold account will be [increased/decreased]
decreased
The adjustment for overapplied overhead:
decreases cost of goods sold and increases net income
A journal entry that debits Depreciation Expense and credits Accumulated depreciation records:
depreciation on office equipment
a journal entry that debits depreciation expense and credits accumulated depreciation records:
depreciation on office equipment
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______.
determine the cost driver
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______. calculate the predetermined overhead rate determine the cost driver assign manufacturing overhead
determine the cost driver
Underapplied or overapplied overhead is the ______.
difference between overhead applied to jobs and actual overhead
Underapplied or overapplied overhead is the ______. sum of overhead applied to jobs and actual overhead same as actual overhead difference between overhead applied to jobs and actual overhead total overhead applied to work in process
difference between overhead applied to jobs and actual overhead
Underapplied or overapplied overhead is the:
difference between overhead applied to work in process and actual overhead
underapplied or overapplied overhead is the
difference between overhead applied to work in process and actual overhead
Labor costs that are easily traced to a job are called ______ laor costs
direct
Select all that apply Categories of manufacturing costs include ______. selling expenses direct labor direct materials manufacturing overhead administrative expenses
direct labor direct materials manufacturing overhead
A journal entry that debits Manufacturing overhead and credits Accounts payable would NOT be used to record ______. miscellaneous factory overhead costs rent on factory equipment factory utilities costs direct labor costs
direct labor costs
A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______.
direct labor costs
Widely used allocation bases in manufacturing include ______.
direct labor hours units of product machine hours direct labor cost
The document used to record the time workers spend on each job and task is a ______.
direct labor time ticket
Major inputs such as lumber and fixtures that can be easily traced to a specific job are called __ __
direct materials
Major material inputs that can be easily traced to a specific job are __ __.
direct materials
When materials are requisitioned into production, ______.
direct materials are recorded in Work in Process direct materials are recorded on the job cost sheet
Select all that apply When materials are requisitioned into production, ______. direct materials are recorded on the job cost sheet indirect materials are recorded in Work in Process direct materials are recorded in Work in Process indirect materials are recorded as a separate line item on the job cost sheet
direct materials are recorded on the job cost sheet direct materials are recorded in Work in Process
Categories of manufacturing costs include ______.
direct materials, direct labor, manufacturing overhead
Categories of manufacturing costs include:
direct materials, direct labor, manufacturing overhead
a journal entry that includes Manufacturing Overhead and Cost of Goods Sold is recorded to:
dispose of underapplied or over-applied overhead
A journal entry that includes Manufacturing overhead and Cost of goods sold is recorded to ______.
dispose of underapplied or overapplied overhead
A journal entry that involves Manufacturing overhead and Cost of goods sold is recorded to ______.
dispose of underapplied or overapplied overhead
To calculate the unit product cost using the job cost sheet ______.
divide the total job cost by the number of units produced
Costs are transferred from raw materials inventory to ______.
either work in process or manufacturing overhead
Costs are transferred from raw materials inventory to ______. finished goods inventory only manufacturing overhead only work in process inventory only either finished goods or work in process either work in process or manufacturing overhead
either work in process or manufacturing overhead
Unadjusted costs of goods sold is calculated by subtracting:
ending finished goods inventory from goods available for sale
To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.
ending raw materials inventory and Indirect materials used
To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.
ending raw materials inventory and indirect materials used
To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract __________.
ending raw materials inventory and indirect materials used
to calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ___
ending raw materials inventory and indirect materials used
to calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______. only beginning raw materials inventory ending raw materials inventory and indirect materials used only ending raw materials inventory beginning raw materials inventory and indirect materials used
ending raw materials inventory and indirect materials used
cost of jobs still unfinished at the end of a period are included in:
ending work in process inventory
Predeterminded over rate per direct labor hour is
estimated manufacturing overhead/esitmated direct labor hours
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.
estimated total cost driver
The formula for a predetermined overhead rate is ______. estimated total manufacturing overhead cost / estimated total cost driver estimated total cost driver / estimated total manufacturing overhead cost actual total manufacturing overhead cost / actual total cost driver actual total cost driver / actual total manufacturing overhead cost
estimated total manufacturing overhead cost / estimated total cost driver
The formula for a predetermined overhead rate is:
estimated total manufacturing overhead cost/ estimated total cost driver
A predetermined overhead rate it calculated by dividing the _____ total manufacturing overhead by the __________ total amount of the allocation base
estimated, estimated
A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total cost driver.
estimated; estimated
A journal entry that debits Manufacturing overhead and credits Prepaid insurance records the:
expiration of prepaid factory insurance
Ideally an allocation base should ______.
explain or influence the amount of overhead incurred
Ideally an allocation base should ______. be a cost associated with producing the firm's goods should not be a cost driver be calculated using a predetermined overhead rate explain or influence the amount of overhead incurred
explain or influence the amount of overhead incurred
Ideally an allocation base should ______. be a cost associated with producing the firm's goods should not be a cost driver explain or influence the amount of overhead incurred be calculated using a predetermined overhead rate
explain or influence the amount of overhead incurred
Ideally an allocation base should:
explain or influence the amount of overhead incurred
The United States requires absorption costing for ______ financial reports.
external
The united States requires absorption costing for _________ financial reports
external financial reports
Select all that apply Manufacturing overhead costs include ______.
factory insurance the factory supervisor's salary
A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.
factory utilities expense rent expense on factory equipment
a journal entry that debits manufacturing overhead and credits accounts payable could be made to record:
factory utilities expense and rent expense on factory equipment
The cost of each individual unit is tracked to products under both job order and process costing.
false
True or false: Job-order costing can only be used in manufacturing firms.
false
True or false: The root cause of inaccurately assigning costs to jobs is generally due to poor tracking of direct labor costs.
false
Completed units that have not yet been sold are found in ___ ___ inventory
finished goods
When a job is completed, its costs are transferred into ______. Cost of Goods Sold Finished Goods Sales Revenue Work in Process
finished goods
A predetermined overhead rate of $20 per direct labor hours means that ______. for each direct labor hour, $20 is added to cover indirect costs the total cost of direct and indirect labor is $20 per hour employees who directly work on the job are paid $20 per hour
for each direct labor hour, $20 is added to cover indirect costs
A journal entry debiting Cost of goods sold and crediting Finished goods is made when:
goods are sold
Select all that apply Manufacturing overhead costs ______. include some materials and labor must be manufacturing costs are indirect costs must be traceable to specific jobs
include some materials and labor must be manufacturing costs are indirect costs
Cost of goods manufactured ______
includes the manufacturing costs of goods finished during the period
Selling and administrative costs first appear on the ______.
income statement
Labor costs charged to Manufacturing Overhead represent ______.
indirect labor costs
labor costs charged to manufacturing overhead represent
indirect labor costs
labor costs charged to manufacturing overhead represent:
indirect labor costs
the journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ___ and credits cash
insurance expense
Select all that apply Process costing ______. is used for mass production uses job cost sheets accumulates costs by customer is used for homogeneous products
is used for mass production is used for homogeneous products
A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______
issuance of materials
A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______.
issuance of materials
will applied manufacturing overhead most likely equal or not equal actual manufacturing overhead?
it would not equal because applied manufacturing overhead is an estimate, so only a coincidence would cause it to equal actual manufacturing overhead
The costs incurred for each unique product, project, or service are recorded on a document called a(n) __ __ sheet
job cost
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the ______.
job cost sheet
A direct labor time ticket includes the ______.
job numbers of jobs worked on amount of time spent on each job
Companies that make many different products each period use ______________ costing
job-order
A SERVICE firm that would most likely use job-order costing is a ______. Multiple choice question.
law practice
Typical cost drivers include ______
machine-hours, flight-hours, computer time
What is the most common method for disposing of the balance in Manufacturing overhead?
making a direct adjustment to Cost of Goods sold
The cost of goods *blank* report summarizes the flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods.
manufactured
The cost of goods __ is the sum of all amounts transferred from Work in process to Finished goods during a period.
manufactured
The cost of goods ___ is the sum of all amounts transferred from Work in process to Finished goods during a period.
manufactured
The schedule of cost of goods ___ summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory.
manufactured
the cost of goods __ is the sum of all amounts transferred from work in process to finished goods during a period
manufactured
the schedule of cost of goods ____ summarizes costs that remain in Work in process inventory and that have been transferred from Work in Process to Finished Goods Inventory
manufactured
Actual manufacturing overhead consists of all ______.
manufacturing costs other than direct labor and direct materials
Actual manufacturing overhead consists of all ______. costs other than direct labor and direct materials manufacturing costs other than direct labor and direct materials indirect costs manufacturing costs
manufacturing costs other than direct labor and direct materials
Actual manufacturing overhead consists of all ______. indirect costs manufacturing costs other than direct labor and direct materials costs other than direct labor and direct materials manufacturing costs
manufacturing costs other than direct labor and direct materials
MOH consists of all:
manufacturing costs other than direct labor and direct materials
Manufacturing overhead consists of all ______.
manufacturing costs other than direct labor and direct materials
Factory labor charges that cannot be easily traced to a job are treated as ______
manufacturing overhead
Factory labor charges that cannot be easily traced to a job are treated as ______.
manufacturing overhead
what is a clearing account?
manufacturing overhead
Labor charges that cannot be easily traced to a job are considered ______.
manufacturing overhead indirect labor
Frank, Inc. recognized $20000 in depreciation on factory equipment. The journal entry would debit:
manufacturing overhead $20000 and credit accumulated depreciation $20000
the journal entry to record depreciation on factory equipment debits:
manufacturing overhead and credits accumulated depreciation
Manufacturing overhead consists of ______.
many different kinds of indirect costs
Companies that use job-order costing make ______.
many different products
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______
materials requisition form
The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______.
materials requisition form
What document specifies the type and quantity of direct materials used on a specific job?
materials requisition form
Labor costs ______.
may be direct or indirect are recorded in basically the same way as material costs
An allocation base is a(n)
measure of activity used to assign overhead costs to products and services
An allocation base is a(n) measure used to assign all manufacturing costs to products and services measure of activity used to assign overhead costs to products and services activity that causes overhead costs to change
measure of activity used to assign overhead costs to products and services
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services
An allocation base is a(n) ______. measure of activity used to assign overhead costs to products and services activity that causes overhead costs to change measure used to assign all manufacturing costs to products and services
measure of activity used to assign overhead costs to products and services
Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is
more complex, but more accurate
Gross margin minus selling and administrative expenses equals ______.
net operating income
Gross profit minus selling and administrative expenses equals ______. net operating assets cost of goods sold net operating income cost of goods manufactured
net operating income
Gross profit minus selling and administrative expenses equals ______. net operating income cost of goods sold net operating assets cost of goods manufactured
net operating income
Gross profit minus selling and administrative expenses equals:
net operating income
Ending Work in Process Inventory represents the cost of goods ______. not yet completed not yet sold to be started on next period
not yet completed
what is the difference between the entries to record depreciation on office equipment and depreciation on factory equipment?
one debits depreciation expense, while the other debits manufacturing obverhead
When labor costs are incurred, _________ are added directly to the Work in Process account.
only direct labor costs
A blend of process and job order costing is called__ costing
operations
A credit balance in the MOH account means overhead was ________.
overapplied
A credit balance in the Manufacturing Overhead account means overhead was ___
overapplied
If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was
overapplied
If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was__
overapplied
The difference between overhead applied to jobs and actual overhead is ____
overapplied or underapplied overhead
The difference between overhead applied to jobs and actual overhead is ______. cost of goods manufactured ending work in process inventory overapplied or underapplied overhead cost of goods sold
overapplied or underapplied overhead
The difference between overhead applied to work in process and actual overhead is
overapplied or underapplied overhead
The difference between overhead applied to work in process and actual overhead is:
overapplied or underapplied overhead
the difference between overhead applied to work in process and actual overhead is
overapplied or underapplied overhead
If the Manufacturing Overhead account has a credit balance at the end of the period that indicates that overhead was ______ and Cost of Goods Sold must be ______.
overapplied, decreased
The process used to assign overhead costs to products is called overhead __________
overhead allocation
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the __ job
overhead applied to
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.
overhead applied to
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job. overhead applied to total cost of predetermined overhead rate for actual overhead for
overhead applied to
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find ______.
overhead applied to the job
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
To keep track of labor time and costs many firms have replaced
paper time tickets with computerized systems
To keep track of labor time and costs, many firms have replaced ______.
paper time tickets with computerized systems
Which of the following would be considered direct materials in a service firm that uses job order costing?
paperwork at a law firm
Non manufacturing costs incurred during a period are treated as
period expenses
Nonmanufacturing costs incurred during a period are treated as ______.
period expenses
Nonmanufacturing costs incurred during a period are treated as ______. liabilities assets product costs period expenses
period expenses
Selling and administrative costs incurred are treated as ______.
period expenses
The formula for applying overhead to a specific job is ______.
predetermined overhead rate × 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
A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.
purchase of materials
a journal entry that debits Raw Materials and credits Accounts Payable is recording the
purchase of materials
All materials that will be used in future production are first recorded in the __ __ Inventory account.
raw materials
Any purchased materials that will go into the finished product are first recorded in the ___ ___ inventory account
raw materials
The journal entry to record the purchase of materials debits ______
raw materials
The journal entry to record the purchase of materials debits ______.
raw materials
__ __ consists of any materials that will be included as part of a finished products.
raw materials
the journal entry to record the purchase of materials debits:
raw materials
When materials are purchased they are first recorded in the ______ account. Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Manufacturing Overhead
raw materials inventory
All materials that will be used in future production are first recorded in the *blank* *blank* account
raw, materials
A journal entry that debits Manufacturing overhead and credits Property taxes payable records the ______.
recognition of accrued property taxes
a journal entry that debits manufacturing overhead and credits property taxes payable records the
recognition of accrued property taxes
a journal entry that debits manufacturing overhead and credits property taxes payable records the:
recognition of accrued property taxes
Total manufacturing overhead costs tend to:
remain fairly constant
Select all that apply A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.
rent expense on factory equipment factory utilities expense
a journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record:
rent expense on factory equipment factory utilities expense
The journal entry to record labor cost credits
salary and wages payable
net operating income is calculated by subtracting ___ from ____
selling and administrative expenses gross margin
Net operating income is calculated by subtracting ______ from ______.
selling and administrative expenses; gross margin
A journal entry that debits Advertising expense and credit Cash would record the incurrence of a:
selling cost
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
Job order costing requires a good record-keeping system that uses __documents that trace direct costs to specific jobs.
source
The job cost sheet serves as a(n) __ __to the overall Work in Process Inventory account.
subsidiary ledger
When all of a company's job cost sheets are viewed collectively they form what is known as a ________.
subsidiary ledger
When calculating the cost of direct materials on the schedule of cost of goods manufactured the cost of indirect materials is:
subtracted from raw materials used in production
When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is ______.
subtracted from raw materials used in production
When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is:
subtracted from raw materials used in production
when calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is:
subtracted from raw materials used in production
Cost of goods manufactured is the ______.
sum of all jobs transferred from Work in process to Finished goods
The balance of work in process inventory may be calculated by ______.
summing the costs of all jobs in process
The balance of work in process inventory may be calculated by ______. subtracting the cost of goods sold from the sum of all manufacturing costs summing the sales value of all jobs in process summing the costs of all jobs in process subtracting the cost of finished goods inventory from the sum of all manufacturing costs
summing the costs of all jobs in process
The balance of work in process inventory may be calculated by ______. summing the sales value of all jobs in process subtracting the cost of goods sold from the sum of all manufacturing costs summing the costs of all jobs in process subtracting the cost of finished goods inventory from the sum of all manufacturing costs
summing the costs of all jobs in process
Nonmanufacturing costs increase ______.
the Selling, General & Administrative expense accounts
Nonmanufacturing costs increase ______. various asset and liability accounts the Manufacturing Overhead account the Selling, General & Administrative expense accounts the Cost of Goods sold account
the Selling, General & Administrative expense accounts
the value of work in process is equal to:
the cost of all unfinished jobs
In a job-order costing system costs flow first to:
the inventory accountants and then to cost of goods sold
In a job-order costing system costs flow first to ______.
the inventory accounts and then to cost of goods sold
In a job-order costing system costs flow first to ______. the income statement and then to the inventory accounts the inventory accounts and then to cost of goods sold cost of goods manufactured and then to the inventory accounts the inventory accounts and then to the Finished Goods account
the inventory accounts and then to cost of goods sold
In a job-order costing system costs flow first to ______. the income statement and then to the inventory accounts the inventory accounts and then to the Finished Goods account cost of goods manufactured and then to the inventory accounts the inventory accounts and then to cost of goods sold
the inventory accounts and then to cost of goods sold
When actual manufacturing overhead costs are incurred, ______.
the manufacturing overhead cost is debited
When actual manufacturing overhead costs are incurred, ______. work in process inventory is credited the manufacturing overhead cost is credited the manufacturing overhead cost is debited work in process inventory is debited
the manufacturing overhead cost is debited
When actual manufacturing overhead costs are incurred, ______. work in process inventory is debited the manufacturing overhead cost is debited work in process inventory is credited the manufacturing overhead cost is credited
the manufacturing overhead cost is debited
Which of the following would not be considered a job in a a service firm that uses job order costing
the tax department in an accounting firm - this is a department - a job would be an individual client
Overhead costs are debited to Work in Process when ______.
they are applied to jobs
Overhead costs are debited to Work in Process when ______. the actual costs are incurred the job is sold they are applied to jobs the job is started
they are applied to jobs
Overhead costs are debited to Work in Process when ______. the job is started the job is sold the actual costs are incurred they are applied to jobs
they are applied to jobs
A direct labor__ __ is a document used to record how long workers spend on each job and task.
time ticket
An hour by hour summary of an employees activities through the day is found on the
time ticket
An hour-by-hour summary of an employee's activities throughout the day is found on the
time ticket
The document used to record the time workers spend on each job and task is called a ______.
time ticket
In the formula Y = a + bX, X represents the estimated ______.
total amount of the allocation base
In the formula Y = a + bX, a represents the estimated ______.
total fixed manufacturing overhead cost
True or false: Job cost sheets serve as a subsidiary ledger to the overall Work in Process Inventory account.
true
True or false: The Manufacturing Overhead account is a temporary account used to accumulate actual and applied overhead costs.
true
Martin Industries had unadjusted cost of goods sold of $450,000. Overhead was underapplied by $30,000. Adjusted cost of goods sold is:
unadjusted cost of goods sold + underapplied overhead: 450,000 +30,000
A debit balance in Manufacturing overhead means overhead was ___
underapplied
If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs it means overhead was
underapplied
a debit manufacturing overhead means it was
underapplied
When only a portion of the units involved in a job are sold, the ______.
unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold
when only a portion of the units involved in a job are sold, the:
unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold
Cost of goods manufactured is the ______. value of all jobs in Finished Goods at the end of a period average value of the Work in Process account value of all jobs transferred from Work in Process to Finished Goods value of all jobs transferred from Finished Goods to Cost of Goods Sold
value of all jobs transferred from Work in Process to Finished Goods
Cost of goods manufactured is the ______. value of all jobs transferred from Work in Process to Finished Goods value of all jobs in Finished Goods at the end of a period average value of the Work in Process account value of all jobs transferred from Finished Goods to Cost of Goods Sold
value of all jobs transferred from Work in Process to Finished Goods
In the formula Y = a + bX, b represents the estimated ______.
variable manufacturing overhead cost per unit
The average manufacturing overhead cost per unit tends to
vary from one period to the next
The average manufacturing overhead cost per unit tends to ______.
vary from one period to the next
Costs are transferred out of finished goods inventory:
when goods are sold
The major difference between job order and process costing is ______. whether the products produced are hand made or machine made whether the products produced are similar or different job order costing is used for products and process costing is used for services
whether the products produced are similar or different
The major difference between job order and process costing is:
whether the products produced are similar or different
Costs of partially completed units are accounted for in ______
work in process
Costs of partially completed units are accounted for in ______.
work in process
Costs of partially completed units are accounted for in ______. cost of goods manufactured finished goods work in process raw materials
work in process
When a job is completed, its costs are transferred out of ______. Cost of Goods Sold Finished Goods Work in Process Manufacturing Overhead
work in process
When a job is completed, the job costs are transferred OUT OF ______.
work in process
When a job is completed, the job costs are transferred out of:
work in process
manufacturing overhead is applied with a debit to:
work in process
units of product that are only partially complete are contained in the _____ _____ ____ Inventory
work in process
when a job is completed, what account is credited?
work in process
a company incurred $10000 in direct labor costs and $8000 in indirect labor costs. The journal entry to record this transaction debits:
work in process $10000 and manufacturing overhead $8000 and credits salaries and wages payable $18000
a company requisitioned $40000 in direct materials and $30000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit:
work in process $40000, debit manufacturing overhead $30000, and credit raw materials $70000
Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit. $100,000 $110,000 $50,000 $105,000
$100,000
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
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 × 600 = $120,000)
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, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$16,000
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, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $30,000 $20,000 $16,000 $24,000
$16,000
Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000
$186,000
Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000 $183,000 $186,000 $191,000
$186,000
Given: Cost of goods manufactured of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.
$228,000
Given: Cost of goods manufactured of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold. $258,000 $240,000 $252,000 $228,000
$228,000
Given: Cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.
$228,000 ($18,000 + $234,000 - $24,000 = $228,000)
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000
$260,000
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000 $302,000 $260,000 $242,000 $278,000
$260,000
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000 $302,000 $278,000 $242,000 $260,000
$260,000
Given the following, compute the cost of goods manufactured. Direct material cost: $40,000 Direct labor cost: $100,000 Applied overhead: $120,000 Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000 $278,000 $302,000 $242,000 $260,000
$278,000
Gemini had Sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Calculate gross profit. $5,000 $24,000 $27,000 $30,000
$30,000
A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours, ______. the total cost of labor and overhead for the job is $360 $360 is assigned to the job to cover indirect costs the total cost of labor for the job is $360
$360 is assigned to the job to cover indirect costs
Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.
$395,000
Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold. $535,000 $395,000 $520,000 $425,000
$395,000
Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.
$395,000 ($110,000 + $410,000 - $125,000 = $395,000)
Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.
$395,000 Reason: Unadjusted cost of goods sold=$110,000 + $410,000 - $125,000=$395,000.
Murphy Manufacturing estimated $100,000 in manufacturing overhead and 5,000 direct labor hours for 2016. Actual overhead for the year was $120,000 and 7,500 actual direct labor-hours were used. How much overhead was applied to a job completed during 2016 that used 200 direct labor-hours? $4,000 $3,200 $4,800 $100,000
$4,000
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 $______
$43,000 Total cost of Job 42= Direct materials + Direct Labor+Predetermined overhead rate x Actual machine hours+$18,000+$12,000+($12 per machine hour X 1,100 machine hours)
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 The cost of goods manufactured, is the cost of jobs completed during the period. Jobs 23A and 45B
A company reports Gross margin of $100,000, Cost of goods sold of $70,000, and Selling and administrative expenses of $45,000. Net operating income (loss) is ______.
$55,000
Luver Corporation's Gross profit is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Calculate the net operating income (loss).
$55,000
Luver Corporation's Gross margin is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Net operating income is ______.
$55,000 ($100,000 - $45,000 = $55,000)
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
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? $115,000 $25,000 $65,000 $90,000
$65,000
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 indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$74,000
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 indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $102,000 $130,000 $70,000 $74,000
$74,000
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 indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $130,000 $70,000 $102,000 $74,000
$74,000
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 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) )
The total cost of a job includes
- Applies manufacturing overhead - direct materials cost - direct labor cost
manufacturing overhead costs include
- Factory insurance - The factory supervisor's salary
Materials requisition forms are used for ______.
- Making journal entries in accounting records - Controlling the flow of materials into production
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.
Manufacturing overhead ______.
- consists of many different types of costs - contains fixed costs i- s an indirect cost
Job order costing would most likely be used in an
- construction company - Soda bottling company would be more likely to use process costing - companies that make different products each period use
Materials requisition forms are used for
- controlling the flow of materials into production - making journal entries in accounting records
Widely used allocation bases in manufacturing are
- direct labor hours - machine hours - direct labor cost - units of product
Typical cost drivers include
- flight hours - computer time - machine hours
A job cost sheet contains
- manufacturing overhead costs charged to the job - materials cost charged to the job - labor costs charged to the job
A job cost sheet contains ______.
- materials costs charged to the job - manufacturing overhead costs charged to the job - labor costs charged to the job
A bill of materials contains the ______.
- quantity of each direct material needed to complete a unit of product - type of each direct material needed to complete a unit of product
A bill of materials contains the
- quantity of each direct material needed to complete a unit of production - type of each direct material needed to complete unit of production
The unit product cost is the same as the
- total job cost divided by number of units - average product cost per unit
Cost assigned to units of production under absorption costing include
- variable manufacturing - fixed manufacturing
The total cost of a job includes ______.
-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead
what is directly charged to the income statement?
-administrative costs -selling costs
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
examples of what manufacturing costs would include:
-factory insurance -factory supervisor's salary
actual overhead costs may not be proportional to the actual amount of the allocation base used because
-many actual overhead costs are fixed -overhead spending may not be under control
actual overhead costs may not be proportional to the amount of the allocation base used because:
-overhead spending may not be under control -many actual overhead costs are fixed
Companies assign costs to products and services to:
-understand product profitability -establish selling prices -value ending inventory
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
The first step in assigning manufacturing overhead is to determine the *blank* *blank* or cost driver
1) allocation 2) base
Place these items in order in which they appear on the schedule of Cost of Goods Sold Unadjusted cost of goods sold Add: underapplied overhead Deduct: Finished goods inventory, ending Adjusted cost of goods sold Cost of goods available for sale
1. Cost of goods available for sale 2. Deduct Finished goods inventory, ending 3. Unadjusted cost of goods sold 4. Add Underapplied overhead 5. Adjusted cost of goods sold
Labor costs:
1. May be direct or indirect 2. Are recorded in basically the same way as material costs
Which of the following statements are true?
1. Raw materials used in production are transferred to work in progress as direct materials 2. When materials are purchased they are recorded in the raw materials inventory account.
When actual manufacturing overhead costs are incurred:
1. The manufacturing overhead cost is debited 2. A balance sheet account is credited
The (1) side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the (2) side is always used to record the actual manufacturing costs incurred. (Enter either debit or credit in each blank.)
1. credit 2. debit
Completed units that have not yet been sold are found in (1) (2) inventory. (Enter only one word per blank.)
1. finished 2. goods
Process costing:
1. is used for homogeneous products 2. is used for mass production
The cost of goods (1) is the sum of all amounts transferred from Work in process to Finished goods during a period. (Enter only one word per blank.)
1. manufactured
The schedule of cost of goods (1) summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory. (Enter only one word per blank.)
1. manufactured
A credit balance in the Manufacturing Overhead account means overhead was (1). (Enter either overapplied or underapplied.)
1. overapplied
Any purchased materials that will go into the finished product are first recorded in the (1) (2) inventory account. (Enter only one word per blank.)
1. raw 2. materials
Materials requisition forms are used for
1. recording the cost of raw materials in the accounting system 2. controlling the flow of materials from inventory into production
The schedule of cost of goods (1) summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold. (Enter only one word per blank.)
1. sold
GAAP requires
1. that manufacturing costs be treated as assets until sold 2. all manufacturing costs be charged to products
A debit balance in Manufacturing overhead means overhead was (1). (Enter either overapplied or underapplied.)
1. underapplied
Units of product that are only partially complete are contained in the (1) (2) (3) inventory. (Enter only one word per blank.)
1. work 2. in 3. process
What methods can be used to dispose of underpaid or overspilled manufacturing overhead?
1.Allocate it to work in progress, finished goods, and cost of goods sold 2. make a direct adjustment to cost of goods sold
direct materials used for the period cost $66,000. Direct labor cost $80,000. Applied overhead was $60,000. Beginning work in process inventory was $27,000 and ending work in process inventory was $25,000. Calculate the cost of goods manufactured.
208,000
Fila Inc, worked on 3 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. The costs of goods manufactured this period is
51,000
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
The total cost of a job includes: check all that apply A. direct materials cost B. actual manufacturing overhead C. non-manufacturing cost D. direct labor cost E. Applied manufacturing overhead
A. Direct materials cost D. Direct Labor Cost E. Applied manufacturing overhead
Place these items from the income statement in the order in which they should appear A. Sales B. Net operating income C. Cost of goods sold D. Selling and administrative expenses E. Gross Margin
A. Sales C. Cost of goods sold E. Gross Margin D. Selling and administrative expenses B. Net operating income
Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of underapplied or overpapplied overhead would: A. Credit manufacturing overhead $5000 B. Debit manufacturing overhead $50000 C. Credit manufacturing overhead $50,000 D. Debit manufacturing overhead $5,000
A. credit manufacturing overhead $5,000 underapplied overhead results in 5000 debit balance in the overhead account. To dispose of it, manufacturing overhead should be credited for 5000