accounting 202 chapter 3 learnsmart

a journal entry debiting cost of goods sold and crediting finished goods is made when

goods are sold

net operating income is calculated by subtracting _____ from _____

selling and administrative expenses; gross margin

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

t/f underapplied or overapplied overhead occurs bc overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels

true

a journal entry that debits raw materials and credits accounts payable is recording the

purchase of materials

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

selling cost

the amount transferred from work in process to finished goods is

cost of goods manufactured

raw materials is a ______ account

asset

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

-balance sheet -income statement

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

which of the following are used to calculate cost of goods available for sale on the schedule of cost of goods sold

-cost of goods manufactured -beginning finished goods inventory

which of the following costs would be classifieds manufacturing overhead?

-factory rent -factory maintenance wages -factory utilities

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

-factory utilities expense -rent expense on factory equipment

manufacturing overhead consists of all

-manufacturing costs other than direct labor and direct materials

actual overhead may not be proportional to the actual amount of the allocation based used bc

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

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

-rent expense on factory equipment -factory utilities expense

which of the following costs are charged directly to the income statement

-selling costs -administrative costs

manufacturing overhead costs include

-the factory supervisor's salary -factory insurance

which are true statements

-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

the journal entry to record the purchase of materials credits

accounts payable

overhead is overapplied if

actual overhead is less than applied overhead

overapplied or underapplied overhead is the difference between

actual total overhead and total overhead applied

to calculate the adjusted cost of goods sold:

add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold

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

which side of the manufacturing overhead account if actual manufacturing overhead entered on?

always the debit side

a simpler method of closing out the balance of manufacturing overhead is

closing it out to cost of goods sold

finished goods

consist of completed, unsold goods

gross margin is calculated by subtracting _____ from ______

cost of goods sold;sales

when overhead is underapplied, a _______ must be made to the manufacturing overhead account to close it out

credit (debiting would be appropriate if overhead were overapplied)

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 manufacturing overhead

a journal entry that debits manufacturing overhead and credits accumulated depreciation records

depreciation on factory equipment

underapplied or overapplied overhead is the

difference between overhead applied to work in process and actual overhead

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

dispose of underapplied or overapplied overhead

the cost of jobs still unfinished at the end of a period are included in

ending work in process inventory

a predetermined overhead rate is calculated by dividing the _____ total manufacturing overhead by the ____ total amount of the allocation base

estimated;estimated

t/f period costs flow from finished goods to cost of goods sold

false

t/f period costs flow from finished goods to cost of goods sold

false

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

false -applied, not actual overhead, costs appear in both the work in process account and the job cost sheet

when a job is completed, which account is debited

finished goods

when a job is completed, which account is debited?

finished goods

when jobs are sold their costs are transferred out of

finished goods

the journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ____ and credits cash

insurance expense

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 journal entry to record expired prepaid factory insurance debits

manufacturing overhead and credits prepaid insurance

the journal entry to record accrued property taxes for a factory building debits

manufacturing overhead and credits property taxes payable

applied manufacturing overhead will most likely ______ actual manufacturing overhead

not equal

a credit balance in the manufacturing overhead account means overhead was

overapplied

the difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

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

raw materials

the journal entry to record issuing materials to be used in production credits

raw materials

the journal entry to record the purchase of materials debits

raw materials

a journal entry that debits manufacturing overhead and credits property taxes payable records the

recognition of accrued property taxes

the journal entry to record labor costs credits

salaries and wages payable

the value of work in process is equal to

the cost of all unfinished jobs

Cost of Goods Manufactured

the manufacturing costs associated with the goods that were finished during the period

units of product that are only partially complete are contained in the _________ ________ ______ inventory

work in process

when a job is completed, the job costs are transferred out of

work in process

when a job is completed, which account is credited

work in process

which account is debited to record direct labor costs

work in process

which accounts are debited in the journal entry to record manufacturing labor costs

work in process and manufacturing overhead

when the allocation method is used to close out the underapplied or oversupplied balance remaining in manufacturing overhead, which accounts are affected?

-work in process -finished goods -cost of goods sold

labor costs charged to manufacturing overhead represent

indirect labor costs

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

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 journal entry to record general selling and administrative costs debits

an expense account and credit cash or a liability

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

applied manufacturing overhead

actual manufacturing overhead costs are recording in the manufacturing overhead account

as they are incurred

what accounts are debited when goods are sold on account

cost of goods sold and accounts receivable

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

cost of goods sold and manufacturing overhead