Accounting Chapter 3
what would correctly record the application of overhead cost?
Work in Process..............................XXX Manufacturing overhead.......XXX
a proper journal entry to record issuing raw materials to be used on a job would be:
Work in Process..........................XXX raw materials..........................XXX
which of the following entries or sets of entries would record sales for the month of july of $200,000 for goods costing $119,000?
accounts receivable...................................200,000 sales..............................................................200,000 cost of goods sold........................................119,000 finished goods...........................................119,000
corporation has provided data concerning the corporation's manufacturing overhead account for the month of july. prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $62,000 and the total of the credits to the account was $73,000. which of the following statements is true?
actual manufacturing overhead for the month was $62,000
there are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves allocation of the balance among several accounts, whereas the other closes any balance directly to:
cost of goods sold
Traves corporation incurred $69,000 of actual manufacturing overhead costs during october. during the same period, the manufacturing overhead applied to Work in Process was $68,000. the journal entry to record the application of manufacturing overhead to Work in Process would include a:
credit to manufacturing overhead of $68,000
during october, beidleman Inc. transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000. the journal entries to record these transactions would include a:
credit to work in Process of $52,000
epolito corporation incurred $87,000 of actual manufacturing overhead costs during September. during the same period, the manufacturing overhead applied to work in process was $89,000. the journal entry to record the incurrence of the actual manufacturing overhead costs would include a:
debit to manufacturing overhead of $87,000
Soledad Corporation had $36,000 of raw materials on hand on December 1st. During the month, the corporation purchased an additional $71,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
debit to raw materials for $71,000
When a job is completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a debit to Work in Process
false
if direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements
false
indirect materials are charged to specific jobs
false
job cost sheets are used to record the costs of preparing routine accounting reports
false
manufacturing overhead is overapplied if actual manufacturing overhead costs for a period are greater than the amount of manufacturing overhead cost that was charged to Work in Process
false
the cost categories that appear on a job cost sheet include selling expense, manufacturing expense, and administrative expense
false
the following entry would be used to record depreciation on manufacturing equipment Work in process.............................................................XXX Accumulated Depreciation.........................XXX
false
the sum of all amounts transferred from the Work In Process account to Finished Goods account represents the Cost of Goods Sold for the period
false
the use of a predetermined overhead rate in a job-order cost system makes it possible to compute the total cost of a job before production is begun
false
when the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job
false
what is one of the accounts they should credit when goods are sold
finished goods
what account should they debit when the production manager has earned her salary
manufacturing overhead
bretthauer corporation has provided data concerning the corporations manufacturing overhead account for the month of july. prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $51,000 and the total of the credits to the account was $64,000. which of the following statement is true?
manufacturing overhead applied to Work in Process for the month was $64,000
arvay corporation has provided data concerning the corporation's manufacturing overhead account for the month of October. prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $62,000 and the total of the credits to the account was $52,000. which of the following statements is true?
manufacturing overhead for the month was underapplied by $10,000
the operations of kalispell company resulted in overapplied manufacturing overhead for the month just completed. what journal entry can be correct if kalispell allocates underapplied or overapplied manufacturing overhead among the work in process, finished goods, and cost of goods sold?
manufacturing overhead.......................................XXX Work in Process...................................................XXX Finished Goods....................................................XXX Cost of Goods sold..........................................XXX
Emco company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labor cost as indirect labor. the effect of this misclassification will be to:
overstate the predetermined overhead rate
in a job-order costing system, the use of indirect materials that have been previously purchased is recorded as a credit to:
raw materials inventory
what account should they debit when the president of the company of the company has earned her salary
salaries and wages expense
which of the following entries would record correctly the monthly salaries earned by the top management of a manufacturing company
salaries expense....................................XXX salaries and wages payable.........XXX
departmental overhead rates are generally preferred to plant-wide overhead rates when:
the activities of the various departments in the plant are not homogeneous
on the schedule of cost of goods manufactured, the final cost of goods manufactured figure represents:
the amount of cost of goods completed during the current year whether they were started before or during the current year
overapplied manufacturing overhead means that:
the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost
in computing is predetermined overhead rate, brady company included its factory insurance cost twice. this error will result in:
the cost of goods manufactured to be overstated
if the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied, then manufacturing overhead would be considered to be underapplied
true
in a job-order cost system, direct labor is assigned to a job using information from the employee time ticket
true
the cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the manufacturing overhead cost applied to the job
true
the formula for computing the predetermined overhead rate is: POR= estimated total manufacturing overhead cost/estimated total amount of the allocation base
true
when completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods
true
music cooperation manufactures violins, violas, cellos, and fiddles and uses a job-order costing system. what account should they debate when the workers who carve the wood for the instruments have earned their pay?
work in process
during May at Shatswell corporation, $57,000 of raw materials were requisitioned from the storeroom for use in production. these raw materials included both direct and indirect materials. the indirect materials totaled $7,000. the journal entry to record this requisition would include a debit to manufacturing overhead of:
$7,000
what journal entry is made in a job-order costing system when $8,000 of materials are requisitioned for general factory use instead of for use in a particular job?
Manufacturing overhead...................................8,000 raw materials.....................................................8,000
during october, doriniri corporation incurred $60,000 of direct labor costs and $5,000 of indirect labor costs. the journal entry to record the accrual of these wages would include a:
debit to Work in Process of $60,000
in july, Essinger Inc. incurred $72,000 of direct labor costs and $3,000 of indirect labor costs. the journal entry to record the accrual of these wages would include a:
debit to manufacturing overhead of $3,000
during february, corporation incurred $65,000 of actual manufacturing overhead costs. during the same period, the manufacturing overhead applied to work in process was $60,000 the journal entry to record the incurrence of the actual manufacturing overhead costs would include a:
debit to manufacturing overhead of $65,000