ACC 213 08 Chapter 3

When the period ends....

Manufacturing Overhead is closed

When the actual overhead is incurred.....

Manufacturing Overhead is Debited

When Labor Costs are incurred, -- -- -- -- are added directly to the -- -- -- account.

Only Direct Labor Costs, Work In Process

The difference between overhead applied to work in process and actual overhead is......

Overapplied OR Underapplied Overhead

When calculating the cost of direct materials on the schedule of Costs of Goods Manufactured, the cost of Indirect materials is....

Subtracted from raw materials used in production

The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next. True or False?

True

Units of product that are only partially completed are put in which inventory?

Work In Process

Manufacturing costs consist of all manufacturing costs EXCEPT for Direct Materials AND Direct Labor. True or False?

True

A journal that debits manufacturing Overhead and credits accounts payable could be made to record.....

A(n) Factory utilities expense OR Rent expense on factory equipment

What side of the Manufacturing Overhead account is actual Manufacturing Overhead entered on?

ALWAYS the debit side

Raw Materials is an -- account

Asset

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

Balance Sheet, Income Statement

A debit balance in manufacturing overhead means that the overhead was....

Underapplied

When only a portion of 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

If an Overapplied overhead is closed out in Cost of Goods Sold, the Cost of Goods Sold account will be,,,,,

Decreased

As items are removed from Raw Materials Inventory into the production process, they are called -- --

Direct Materials

How to calculate total manufacturing costs?

Direct Materials + Direct Labor + Applied Manufacturing Overhead

Period costs flow from finished goods to cost of goods sold. True or False

False

Completed units that have not yet been sold are put in which inventory?

Finished Goods

When a job is completed which account is debited?

Finished Goods

Net Operating Income Equation

Gross Margin - Administrative and Sales Expenses

Unadjusted Cost of goods sold equation:

(Costs of goods manufactured + Beginning Finished Goods Inventory) - Ending Finished Goods Inventory

Work In Process Consists of what 3 things?

1. Actual Direct Material Cost 2. Applied Manufacturing Overhead 3. Actual Direct Materials Cost

What 2 methods can be used to dispose of a(n) underapplied or overapplied overhead?

1. Allocating it among Work In Process, Finished Goods, and Cost Of Goods Sold 2. Closing it out to Cost Of Goods Sold

When the overhead is applied to Work In Process.......

Manufacturing overhead is Credited

Average Overhead costs may not be proportional to the actual amount of the allocation base used because......

Many actual overhead costs are fixed AND Overhead spending may not be under control

A credit balance in Manufacturing Overhead means that the overhead was......

Overapplied

Any purchased materials that will go into the finished product are first recorded in _______ ________ inventory account.

Raw Materials

How to find the amount of Raw Materials used in production?

Raw Materials available for use in production - Ending Raw Materials Inventory

Gross Margin Equation:

Sales - COGS

The Value of Work In Process is equal to.....

The Cost of all unfinished jobs

What is used to summarize costs that remain in the finished goods inventory and that have been transferred to cost of goods sold?

The Schedule Of Costs Of Goods Sold

Cost of goods manufactured includes......

The manufacturing of goods finished during the period

What is cost of goods manufactured?

The sum of all amounts transferred from Work in Process to Finished goods during a period

Which costs are charged directly to the Income Statement? Administrative Costs Manufacturing Overhead Direct Materials Selling costs Direct Labor

Administrative and Selling Costs

What appears on the job cost sheets and in the Work In Process account?

Applied Manufacturing Overhead

Actual Manufacturing Overhead Costs are recorded in the Manufacturing Overhead Account.....

As they are incurred

What account(s) 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

How to find the amount of Raw Materials available for use in production?

Beginning Raw Materials Inventory + Raw materials Purchased

The Simpler Method of closing out the balance of Manufacturing Overhead is......

Closing it out to Cost of Goods Sold

What two accounts are involved when underapplied or overapplied overhead is closed out using the simpler method?

Cost of Goods Sold AND Manufacturing Overhead

When the allocation method is used to close out the underapplied or overapplied balance remaining in Manufacturing overhead, which accounts are affected?

Cost of Goods Sold, Work In Process, AND Finished Goods

Actual Manufacturing Overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of Underapplied or Overapplied overhead would be:

Credit Manufacturing Overhead $5,000

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

Credit, Debit

Journal entry to record goods sold on account

Debit: Accounts receivable & COGS Credit: Revenue, Inventory, and Sales tax Liability

Journal entry that records the incurrence of a selling cost

Debit: Advertising Expense Credit: Cash

Journal Entry that records goods that are sold

Debit: Cost of Goods Sold Credit: Finished Goods

Journal entry to record the depreciation of office equipment

Debit: Depreciation Expense Credit: Accumulated Depreciation

Journal Entry to record completion of a job

Debit: Finished Goods Credit: Work In Process

Journal entry to record the depreciation of factory equipment

Debit: Manufacturing Overhead Credit: Accumulated Depreciation

Journal entry to record expired prepaid factory Insurance

Debit: Manufacturing Overhead Credit: Prepaid Insurance

Journal Entry to record accrued property taxes on its manufacturing facility

Debit: Manufacturing Overhead Credit: Property Taxes Payable

Journal Entry to record Manufacturing overhead applied to job

Debit: Work In Process Credit: Manufacturing Overhead

The journal entry to record the purchase of direct and indirect materials into production.

Debit: Work In Process & Manufacturing Overhead Credit: Accounts Payable

The Journal entry to record direct and indirect labor costs.

Debit: Work In Process & Manufacturing Overhead Credit: Salaries and wages payable

The cost of jobs still unfinished by the end of the period are included in......

Ending Work In Process Inventory

Predetermined Overhead Rate Equation:

Estimated Manufacturing Overhead / Estimated Allocation Base

When costs are sold their costs are transferred out of.....

Finished Goods