Acct 3030 Ch. 3

the schedule of cost of goods sold

summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold; contains direct materials, direct labor and manufacturing overhead

The value of work in process is equal to:

the cost of all unfinished jobs

overapplied or underapplied overhead

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

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

balance sheet; income statement

unadjusted cost of goods sold is calculated by:

subtracting ending finished goods inventory from goods available for sale

the schedule of cost of goods manufactured

summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods; contains direct materials, direct labor and manufacturing overhead

cost of goods manufactured

the amount transferred from Work in Process to Finished Goods; includes the manufacturing costs associated with units of product that were finished during the period

What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

1. Closing it out to Cost of Goods Sold 2. Allocating it among Work in process, Finished goods, and Cost of goods sold

net operating income formula

gross margin - selling and administrative expenses

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

overapplied

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

Applied manufacturing overhead is entered on what side of the manufacturing overhead account?

always the credit side

Actual manufacturing overhead is entered on what side of the manufacturing overhead account?

always the debit side

Journal entry for the application of manufacturing overhead costs

debit Work in process and credit Manufacturing overhead

A debit balance in the Manufacturing Overhead account means overhead was...

underapplied