Chapter 2

If the Manufacturing Overhead account has a _________ balance at the end of the period that indicates that overhead was underapplied and Cost of Goods Sold must be _____________

debit; increased

Hands on work that can be easily traced to a specific product is called _________ ________________.

direct labor

What are major inputs such as lumber and fixtures that can be easily traced to a specific job?

direct materials

A predetermined overhead rate is calculated by dividing the _________ total manufacturing overhead by the ___________ total cost driver.

estimated; estimated

What inventory consists of completed units that have not yet been sold?

finished goods inventory

When a job is completed, which account is debited?

finished goods inventory

What provides a detailed record of the costs incurred to complete a specific job

job cost sheet

Companies that use job-order costing:

make unique products

Cost of goods _______________ is the total cost of jobs completed during the period.

manufactured

The journal entry to record issuing materials to be used in production credits:

raw materials

What consists of any materials that will be included as part of a part of a finished product?

raw materials

When materials are purchased they are recorded in what account?

raw materials inventory account

The job cost sheet serves as a ____________ ______________ to the overall work in process inventory account

subsidiary ledger

If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs means overhead was ____________

underapplied

Which account is debited when manufacturing overhead is applied?

work in process inventory

Materials requisition forms are used for:

- controlling the flow of materials from inventory - recording the cost of raw materials in the accounting system

Steps to assigning manufacturing overhead costs using a predetermined overhead rate:

- determine to allocation base (cost driver) - calculate the predetermined overhead rate - assign manufacturing overhead to products

Categories of manufacturing costs:

- direct labor - manufacturing overhead - direct materials

Which would be classified as manufacturing overhead?

- factory utilities - a factory supervisor's salary - depreciation on machinery

Manufacturing overhead costs:

- include some materials and labor - must be manufacturing costs - are indirect costs

Process costing:

- is used for homogeneous products - is used for mass production

What is included on a direct labor time ticket?

- the amount of time spend on each job - the number of jobs worked on

Steps from the schedule of COGS manufactured:

1. Total current manufacturing costs 2. Plus: Beginning WIP inventory 3. Less: Ending WIP inventory 4. Cost of goods manufactured

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

Work in process and manufacturing overhead

When calculating a predetermined overhead rate, the ideal allocation should be a ___________ ______________.

cost driver