ACCT 202 CH 3 SB

Calculate the cost of goods manufactured: - Direct materials used for the period cost: $66,000 - Direct labor cost $80,000 - Applied overhead $60,000 - Beginning WIP inventory $27,000 - Ending WIP inventory $25,000

$208,000 (DM + DL + Applied OH + Beg WIP Inv. - Ending WIP Inv.)

Meep Industries had unadjusted cost of goods sold of $300,000. Overhead was overapplied by $20,000. Adjusted cost of goods sold is ________.

$280,000 ($300,000 - $20,000)

Calculate unadjusted cost of goods sold: - Cost of goods manufactured: $410,000 - Beginning FG inventory: $110,000 - Ending FG inventory: $125,000

$395,000 (cost of goods manufactured + beg FG inv. - end FG inv.)

Which of the following statements are true? - Raw materials inventory only includes the cost of direct materials - 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 - Direct labor costs flow through the raw materials inventory account

- 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

Selling and administrative costs first appear on the ____________.

income statement

Labor costs charged in manufacturing overhead represent _______ labor costs.

indirect

Manufacturing overhead consists of all __________.

manufacturing costs other than direct labor and direct materials

Gross margin minus selling and administrative expenses equals _________.

net operating income

Which of the following would NOT be charged to the manufacturing overhead account? - Non-manufacturing costs - Factory rent - Depreciation on factory equipment - Supervisor's salary

non-manufacturing costs

When labor costs are incurred, ________ labor costs are added directly to the work in process account.

only direct

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

raw materials

A 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

Gross margin is calculated by subtracting _________ from __________.

- cost of goods sold - sales

Net operating income is calculated by subtracting __________ from __________.

- selling and administrative expenses - gross margin

Raw materials inventory is a(n) ________.

asset

The company applies overhead using direct labor hours as the cost driver. Calculate the amount that overhead was overapplied or underapplied: - Estimated manufacturing overhead: $500,000 - Estimated direct labor hours 200,000 - Actual manufacturing overhead $625,000 - Actual direct labor hours 260,000

$25,000 overapplied

Given the following, calculate total manufacturing costs: - Direct materials: $40,000 - Direct labor: $100,000 - Manufacturing overhead applied: $120,000 - Beginning Work in progress inventory: $30,000 - Ending Work in process inventory: $30,000 - Ending Work in process inventory: $12,000

$260,000 (DM + DL + Applied OH)

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 (DM + DL + Applied OH + Beg WIP Inv. - End WIP Inv.)

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 (DM + DL + Applied OH + Beg WIP Inv. - End WIP Inv.)

Raw materials is a(n) _________ account.

asset

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 (gross margin - selling and administrative expenses)

Given the following, calculate total manufacturing costs: - Direct materials: $62,000 - Direct labor: $78,000 - Manufacturing overhead applied: $46,000 - Actual manufacturing overhead: $51,000 - Beginning WIP inventory $32,000 - Ending WIP inventory: $35,000

$186,000 (DM + DL + Applied OH)

Work in process consists of:

- actual direct labor cost - actual direct materials cost - applied manufacturing overhead

Overapplied or underapplied overhead is the difference between ___________:

actual overhead and total overhead applied

Overhead is overapplied if __________.

actual overhead is less than applied overhead

Overhead is underapplied if ________.

actual overhead is more than applied overhead

To calculate the adjusted cost of goods sold _______.

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

Job cost sheets and the work in process account contain _______ manufacturing overhead.

applied

Actual manufacturing overhead costs are recorded in the manufacturing overhead account ____________.

as they are incurred

Finished goods consist of:

completed, unsold goods

Unadjusted cost of goods sold is calculated by subtracting:

ending finished goods inventory from the sum of beginning finished goods inventory and cost of goods manufactured

True or False: Actual overhead costs appear in the work in process account but not on the job sheet.

false

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

false

Completed units that have not yet been sold are found in __________ _______ inventory.

finished goods

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

finished goods

Sales minus cost of goods sold equals ________.

gross margin

Costs of partially completed units are accounted for in __________.

work in process

Manufacturing overhead is applied with a debit to ___________.

work in process