ACC 202 Chapter 3

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

The simpler method of closing out the balance of Manufacturing overhead is closing it out to

COGS

The schedule of cost of goods sold summarizes costs that remain in Finished goods inventory and that have been transferred to

Cost of Goods Sold

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

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.

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 debits ______. Multiple choice question.

Work in process $40,000, debit Manufacturing overhead $30,000 and credit Raw materials $70,000

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 purchase of materials credits

accounts payable

Manufacturing overhead applied to production is always recorded on the credit side of the manufacturing overhead account and the debit side is always used to record the

actual manufacturing costs incurred.

The Manufacturing Overhead account is debited when

actual overhead costs are incurred

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

The journal entry to record selling and administrative salaries debits

an expense account and credits Cash or a liability.

Overhead is overapplied if actual overhead is less than

applied overhead

Overhead is underapplied if actual overhead is more than

applied overhead

The journal entry to record accrued property taxes for a factory building debits MO and

credits Property Taxes payable.

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to

debit Manufacturing overhead $8,000 and credit Accounts payable $8,000

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

Labor costs charged to Manufacturing Overhead represent

indirect labor costs

A journal entry that debits Work in process and credits Manufacturing overhead is recording the application of

manufacturing overhead costs.

A credit balance in the Manufacturing Overhead account means overhead was

overhead

Selling and administrative costs incurred are treated as

period expenses

The journal entry to record the purchase of materials debits

raw materials

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to

record direct labor costs

The journal entry to record issuing both direct and indirect materials into production debits

work in process and and manufacturing

Units of product that are only partially complete are contained in

work in process inventory.

When a job is completed, the job costs are transferred OUT OF

work in progress

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.

purchase of materials

Any purchased materials that will go into the finished product are first recorded in the

raw materials inventory

Finished goods consists of completed,

unsold goods

Which of the following costs are charged directly to the income statement?

administrative and selling costs

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record

administrative salaries

Net operating income is calculated by subtracting ______ from ______.

selling and administrative expenses; gross margin

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record

factoring utilities expense and rent expense on factory equipment

Gross margin minus selling and administrative expenses equals

net operating income

When labor costs are incurred, only direct labor costs are added directly to the

work in progress account

Cost of goods manufactured is the sum of all jobs transferred from Work in process to

Finished goods

The schedule of cost of goods manufactured summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to

Finished goods inventory.

Nomanufacturing cost would not be charged to

MOC

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

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records

the issuance of materials.

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account as

they are incurred

A debit balance in Manufacturing overhead means overhead was

under applied

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.

Manufacturing overhead costs include

factory rent, factory utilities, factory maintenance wages

The cost of goods. is the sum of all amounts transferred from Work in process to Finished goods during a period.

Manufactured/completed/produced

What side of the Manufacturing overhead account is actual manufacturing overhead entered on?

Always debit side