ACCT Chapter 3

When a job is completed, the job costs are transferred OUT OF ______.

WIP

The 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

To calculate total manufacturing costs, add direct materials, direct labor and ______.

applied manufacturing overhead

Which of the statements regarding closing out over or underapplied overhead is correct? a. Both methods are equally accurate. b. Both methods are equally simple. c. Closing to Cost of goods sold is simpler, and allocating is more accurate. d. Allocating is simpler, and closing to Cost of goods sold is more accurate.

c

Which of the following would not be charged to the Manufacturing overhead account? Depreciation on factory equipment Nonmanufacturing costs Factory rent Supervisor's salary

nonmanufacturing costs

When labor costs are incurred, _________ labor costs are added directly to the Work in Process account.

only direct

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

overapplied or underapplied overhead

The journal entry to record the purchase of materials debits ______.

raw materials

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

Select all that apply Manufacturing overhead costs include ______. factory insurance the CEO's salary the factory supervisor's salary direct materials office equipment depreciation

factory insurance the factory supervisor's salary

When a job is completed, its costs are transferred into ______.

finished goods

Selling and administrative costs first appear on the ______.

income statement Reason: Selling and administrative costs are recorded, as they are incurred, on the income statement as expenses.

Labor costs charged to Manufacturing Overhead represent ______ labor costs.

indirect

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.

purchase of materials

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

raw material

Which account is credited when manufacturing overhead is applied?

MOH

Underapplied or overapplied overhead is the ______. a. actual overhead b. overhead applied to work in process c. difference between overhead applied to work in process and actual overhead d. sum of overhead applied to work in process and actual overhead

c

The ending balance in retained earnings = beginning balance in retained earnings + net operating income - _______.

dividends

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to Cost of Goods Sold for the sale of 600 of the units is ______.

$120,000 Reason: $200,000 ÷ 1,000 × 600 = $120,000

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

$186,000 Reason: Total manufacturing costs= $62,000 +$78,000 + $46,000 = $186,000.

The payment of a dividend ______ retained earnings.

decreases

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______. a. ending raw materials inventory and Indirect materials used b. only beginning raw materials inventory c. beginning raw materials inventory and Indirect materials used d. only ending raw materials inventory

a

Select all that apply Which of the following statements are true? a. When materials are purchased they are recorded in the Raw materials inventory account. b. Direct labor costs flow through the Raw materials inventory account. c. Raw materials inventory only includes the cost of direct materials. d. Raw materials inventory represents the cost of materials not yet used in production.

a, d

Manufacturing overhead consists of all ______. a. manufacturing costs b. costs other than direct labor and direct materials c. manufacturing costs other than direct labor and direct materials d. indirect costs

c. manufacturing costs other than direct labor and direct materials

The simpler method of closing out the balance of Manufacturing overhead is ______.

closing it out to Cost of goods sold

What side of the Manufacturing overhead account is applied manufacturing overhead entered on?

credit

When only a portion of the units involved in a job are sold, the ______. a. unsold units are transferred to another job cost is held in the finished goods account until b. all units in the job are sold entire cost of the job is transferred from c. finished goods to cost of goods sold d. unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

d

What side of the Manufacturing overhead account is actual manufacturing overhead entered on?

debit