D101 Cost & Managerial Accounting Module 3

(Debit) Work-in-process inventory (Credit) Wages payable.

A company has accrued but has not paid direct labor wages in cash. What is part of the journal entry to record the amount of direct labor wages earned?

job order costing system

A___________ accumulates the costs of specific jobs so that it can be used to determine the profitability of those jobs.

When the activities performed in each process center are different for all units produced

In which case is it appropriate to use job costing? -When a company supports more than one product line -When the activities performed in each process center are different for all units produced -When the costs of outsourcing exceed the benefits -When rental costs are allocated among various product lines

Debit to manufacturing overhead for $1,000

Indirect materials costing $1,000 were transferred from a materials warehouse to be used in production. What should be included in the journal entry necessary to record this transaction?

Cost of Goods Manufactured (COGM)

The amount of __________ represents the total cost of items for which production was completed during the period. This cost includes some costs incurred in prior periods. (from beginning work-in-process inventory) and most costs incurred during this period.

cost of goods manufactured statement.

The beginning raw materials inventory + the raw materials purchased during the period - the ending raw materials inventory = the total raw materials used in production during the period, which is the raw materials portion of the _____________________

Total cost of items for which production was completed during the period.

What is represented by the amount of cost of goods manufactured?

(Debit) Work-in-process inventory (Credit) Manufacturing overhead.

What is the correct debit in a journal entry to record the allocation of manufacturing overhead to production?

(Debit) Manufacturing OH (Credit) Cost of Goods Sold

What is the journal entry to close the Cost of Goods Sold Account?

(Debit) Finished Goods Inventory (Credit) Work in Process Inventory

What is the journal entry to transfer Work in Process Inventory to Finished goods?

Beginning inventory + purchases - Ending = The amount actually used in production.

When preparing a cost of goods manufactured schedule, raw materials used in production is calculated by this formula:

Cost of Goods Manufactured: Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (60,000) Raw materials used in production 380,000 Direct labor costs 260,000 Applied manufacturing overhead costs 250,000 Total manufacturing costs 890,000 Work-in-process inventory, beginning balance 150,000 Work-in-process inventory, ending balance (125,000) Cost of goods manufactured 915,000

Data for a company for the year are as follows: Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 260,000 Direct materials inventory, beginning balance 85,000 Work-in-process inventory, beginning balance 150,000 Applied manufacturing overhead costs 250,000 Finished goods inventory, ending balance 140,000 Direct materials inventory, ending balance 60,000 Work-in-process inventory, ending balance 125,000 Finished goods inventory, beginning balance 100,000 What is the cost of goods manufactured for the company?

finished goods account

Once a job is completed, it is moved from work-in-process to a ___________.

(Debit) finished goods inventory (Credit) work-in-process inventory

Once a job is completed, it is moved from work-in-process to a finished goods account. This is done by ?

The predetermined manufacturing overhead rate is found by dividing the total estimated manufacturing overhead by the total estimated activity level (direct labor hours). Total estimated manufacturing overhead includes all manufacturing costs except for direct labor and direct materials; thus, the total estimated manufacturing overhead equals the sum of indirect materials, indirect labor, portion of rent expense for factory, and depreciation on production equipment: $140,000 = $40,000 + $15,000 + (3/4 × $60,000) + $20,000. $120,000/40,000 hours = $3.00 per direct labor hour.

A manufacturing business determines the manufacturing overhead rate on the basis of direct labor hours and has estimated the following budget for Year 1: Indirect materials $40,000 Indirect labor $15,000 Building rent* $60,000 Depreciation on production equipment $20,000 Direct labor $60,000 Direct materials $82,000 Machine hours 20,000 hours Direct labor hours 40,000 hours *1/4 of the building is for non-factory administrative offices. What is this business's predetermined manufacturing overhead rate using the data above?

The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead by the total estimated activity level (direct labor hours). Total estimated manufacturing overhead includes all manufacturing costs except for direct labor and direct materials; thus, the total estimated manufacturing overhead equals the sum of indirect materials, indirect labor, portion of rent expense for factory, and depreciation on production equipment $140,000 = $52,000 + $17,000 + (2/3 × $72,000) + $23,000. $140,000/35,000 hours = $4.00 per direct labor hour.

A manufacturing business, estimated the following budget for Year 1: Indirect materials $52,000 Indirect labor$17,000 Building rent*$72,000 Depreciation on production equipment $23,000 Direct labor $60,000 Direct materials $82,000 Machine hours 25,000 Direct labor hours 35,000 *1/3 of the building is for non-factory administrative offices. Using the data above, what is Lexiplus's predetermined manufacturing overhead rate?

Raw materials inventory Manufacturing overhead Work-in-process inventory Finished goods inventory Cost of goods sold

A manufacturing company performed five actions: 1. Purchased raw materials on account 2. Used raw materials as indirect materials in the manufacturing process 3. Applied overhead to the manufacturing process 4. Transferred the completed goods to the finished goods warehouse 5. Sold the completed goods What is the correct sequence of debits necessary in making the journal entries to record these five actions?

The correct sequence of debits is: Raw materials inventory Manufacturing overhead Work-in-process inventory Finished goods inventory Cost of goods sold.

A manufacturing company performed the following five actions: 1. Purchased raw materials on account. 2. Used raw materials as indirect materials in the manufacturing process. 3. Applied overhead to the manufacturing process. 4. Transferred the completed goods to the finished goods warehouse. 5. Sold the completed goods. What is the correct sequence of debits necessary in making the journal entries to record these five actions?

Cost of Goods Manufactured Schedule

A schedule supporting the income statement that summarizes the total cost of goods manufactured and transferred out of the work-in process inventory account during a period; these costs include direct materials, direct labor, and applied manufacturing overhead.

Cost of goods sold Direct materials inventory, beginning balance 70,000 Direct materials purchased 355,000 Total direct materials available 425,000 Direct materials inventory, ending balance (85,000) Raw materials used in production 340,000 Direct labor costs 370,000 Applied manufacturing overhead costs 284,000 Total manufacturing costs 994,000 Work-in-process inventory, beginning balance 125,000 Work-in-process inventory, ending balance (130,000) Cost of goods manufactured 989,000 Finished goods inventory, beginning balance 100,000 Finished goods inventory, ending balance (120,000) Unadjusted cost of goods sold 969,000 Less overapplied manufacturing overhead (5,000) Adjusted cost of goods sold 964,000

Below are the financial data for Bullzai, Inc., for the year: Work-in-process inventory, ending balance 130,000 Finished goods inventory, beginning balance 100,000 Direct materials purchased 355,000 Direct labor costs 370,000 Actual manufacturing costs 279,000 Finished goods inventory, ending balance 120,000 Direct materials inventory, ending balance 85,000 Work-in-process inventory, beginning balance 125,000 Direct materials inventory, beginning balance 70,000 Applied manufacturing overhead costs 284,000 What is the total adjusted cost of goods sold?

The only error in the above calculation is that the underapplied overhead should have been added to cost of goods sold, making the adjusted cost of goods sold $940,000 instead of $908,000.

Cost of Goods Sold Beginning finished goods inventory $120,000 Cost of goods manufactured 874,000 Cost of goods available for sale $994,000 Ending finished goods inventory (70,000) Unadjusted cost of goods sold $924,000 Underapplied manufacturing overhead (16,000) Adjusted cost of goods sold $908,000 There is an error in the above cost of goods sold calculation. What should the adjusted cost of goods sold number be?

work-in-process

Costs are accumulated in a _________ account through debits to that account.

Cost of Goods Sold: Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (120,000) Raw materials used in production 320,000 Direct labor costs 290,000 Applied manufacturing overhead costs 320,000 Total manufacturing costs 930,000 Work-in-process inventory, beginning balance 150,000 Work-in-process inventory, ending balance (180,000) Cost of goods manufactured 900,000 Finished goods inventory, beginning balance 200,000 Finished goods inventory, ending balance (140,000) Unadjusted cost of goods sold 960,000 Less overapplied manufacturing overhead (36,000) Adjusted cost of goods sold 924,000

Data for a company for the year are as follows: Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 290,000 Direct materials inventory, beginning balance 85,000 Work-in-process inventory, beginning balance 150,000 Applied manufacturing overhead costs 320,000 Finished goods inventory, ending balance 140,000 Direct materials inventory, ending balance 120,000 Work-in-process inventory, ending balance 180,000 Finished goods inventory, beginning balance 200,000 What is the adjusted cost of goods sold?

Cost of Goods Manufactured (COGM)

Effectively, ________ is simply the flow of costs out of the work-in-process account during the period.

(Debit) Manufacturing overhead for $17,000 (Credit) Cost of goods sold for $17,000 This journal entry reduces cost of goods sold for the $17,000 in overapplied overhead.

For a certain year, a company had actual manufacturing overhead of $100,000 and applied manufacturing overhead of $117,000. What should be included in the journal entry necessary to close the manufacturing overhead account?

Cost of Goods Sold Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (70,000) Raw materials used in production 370,000 Direct labor costs 340,000 Applied manufacturing overhead costs 279,000 Total manufacturing costs 989,000 Work-in-process inventory, beginning balance 130,000 Work-in-process inventory, ending balance (125,000) Cost of goods manufactured 994,000 Finished goods inventory, beginning balance 100,000 Finished goods inventory, ending balance (120,000) Unadjusted cost of goods sold 974,000 Underapplied manufacturing overhead 5,000 Adjusted cost of goods sold 979,000

Here are data for Corollary Marketing for the year: Finished goods inventory, ending balance 120,000 Direct materials inventory, ending balance 70,000 Work-in-process inventory, beginning balance 130,000 Work-in-process inventory, ending balance 125,000 Finished goods inventory, beginning balance 100,000 Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 340,000 Direct materials inventory, beginning balance 85,000 Applied manufacturing overhead costs 279,000 What is the total adjusted cost of goods sold?

Cost of goods manufactured: Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (70,000) Raw materials used in production 370,000 Direct labor costs 340,000 Applied manufacturing overhead costs 279,000 Total manufacturing costs 989,000 Work-in-process inventory, beginning balance 130,000 Work-in-process inventory, ending balance (125,000) Cost of goods manufactured 994,000

Here are data for Paradigm Company for the year: Finished goods inventory, ending balance 120,000 Direct materials inventory, ending balance 70,000 Work-in-process inventory, beginning balance 130,000 Work-in-process inventory, ending balance 125,000 Finished goods inventory, beginning balance 100,000 Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 340,000 Direct materials inventory, beginning balance 85,000 Applied manufacturing overhead costs 279,000 What is the total cost of goods manufactured?

Debit manufacturing overhead is used to record the amount of indirect labor.

In a production facility, indirect labor and related wages include personnel, such as maintenance and repair employees. Assume that indirect labor wages are being accrued but have not yet been paid in cash. Which journal entry is used to record the amount of indirect labor?

underapplied , overapplied

In the cost of goods sold calculation, __________overhead is added to, and _________ overhead is subtracted from, the costs transferred from the finished goods inventory account into the cost of goods sold account.

cost of goods sold account

Remember that overapplied or underapplied overhead is usually charged to the ____________.

$190,000

Smartistry has the following information in its accounting records: Beginning finished goods inventory Balance $120,000 Ending finished goods inventory Balance $80,000 Beginning work-in-process inventory $40,000 Ending work-in-process inventory $70,000 Cost of goods manufactured $150,000 Based on the above balances, what is the amount of Smartistry's cost of goods sold?

debit

The _______ side of the work-in-process T-account reflects the elements of the cost of goods manufactured statement (direct materials, direct labor, and applied overhead)

credit

The ________ side of the T-account reflects the cost of the goods manufactured for the period and finished.

cost of goods manufactured schedule

The ____________ summarizes in one statement the activity in the work-in-process T-account.

Costs of Goods Manufactured (COGM)

The aggregate lifetime cost of the inventory completed this period.

work-in-process and finished goods T-accounts

The cost of goods manufactured and the cost of goods sold schedules follow directly from the activity in the __________and______________.

Cost of Goods Manufactured: Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (120,000) Raw materials used in production 320,000 Direct labor costs 290,000 Applied manufacturing overhead costs 320,000 Total manufacturing costs 930,000 Work-in-process inventory, beginning balance 150,000 Work-in-process inventory, ending balance (180,000) Cost of goods manufactured 900,000

The data for a company for the year: Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 290,000 Direct materials inventory, beginning balance 85,000 Work-in-process inventory, beginning balance 150,000 Applied manufacturing overhead costs 320,000 Finished goods inventory, ending balance 140,000 Direct materials inventory, ending balance 120,000 Work-in-process inventory, ending balance 180,000 Finished goods inventory, beginning balance 200,000 What is the total cost of goods manufactured for the company?

production, costs of goods manufactured

The debits to that T-account indicate the costs put into __________ during the period, and the credits to that T-account represent the ____________ (or finished) during the period.

debits, credits

The finished goods T-account reflects the elements of the cost of goods sold schedule. The _______ to the finished goods account represent the cost of goods manufactured for the period, and the _________ to the finished goods T-account reflect the cost of goods sold for the period.

cost of goods manufactured schedule and the cost of goods sold schedule.

The flow of goods through the associated T-accounts is summarized quite nicely in the ___________and ____________. These two schedules summarize the debits and credit to the work-in-process and finished goods T-accounts.

Cost of Goods Manufactured Direct materials inventory, beginning balance 70,000 Direct materials purchased 355,000 Total direct materials available 425,000 Direct materials inventory, ending balance (85,000) Raw materials used in production 340,000 Direct labor costs 370,000 Applied manufacturing overhead costs 284,000 Total manufacturing costs 994,000 Work-in-process inventory, beginning balance 125,000 Work-in-process inventory, ending balance (130,000) Cost of goods manufactured 989,000

What is the total cost of goods manufactured? Work-in-process inventory, ending balance 130,000 Finished goods inventory, beginning balance 100,000 Direct materials purchased 355,000 Direct labor costs 370,000 Actual manufacturing overhead costs 279,000 Finished goods inventory, ending balance 120,000 Direct materials inventory, ending balance 85,000 Work-in-process inventory, beginning balance 125,000 Direct materials inventory, beginning balance 70,000 Applied manufacturing overhead costs 284,000

(Debit) Cash or AR (Credit) Sales Revenue (Debit) Costs of Goods Sold (Credit) Finished Goods Inventory

When finished goods are sold, which account is debited? Cost of goods sold Manufacturing overhead Finished goods inventory Direct materials inventory

Direct materials, direct labor, and applied manufacturing overhead

Which costs are included in the computation of total manufacturing costs?

Manufacturing overhead applied cost Direct labor costs Raw materials used in production

Which items are included in work-in-process inventory?

Work-in-process inventory is debited when production is taking place. It is debited when direct materials and direct labor are used in production and when manufacturing overhead costs are applied.

Which journal entry is used to record a transfer of completed products from a factory to the finished goods warehouse?

Credit manufacturing overhead is used to record the application of manufacturing overhead.

Which journal entry is used to record the application of manufacturing overhead?

Overapplied manufacturing overhead is subtracted in the cost of goods sold calculation.

Which statement is correct when making the cost of goods sold calculation? -Beginning finished goods inventory is subtracted in the cost of goods sold calculation. -Ending finished goods inventory is added in the cost of goods sold calculation. -Overapplied manufacturing overhead is subtracted in the cost of goods sold calculation. -Overapplied manufacturing overhead is added in the cost of goods sold calculation.

The total raw materials used in production during the period

You have been given the following manufacturing cost information by the cost accounting manager in the organization: -the beginning raw materials inventory -the raw materials inventory purchased during the period -the ending raw materials inventory at the end of the period Which section of the cost of goods manufactured statement can you prepare with the above information?

The adjusted cost of goods sold for the period = beginning finished goods inventory + the cost of goods manufactured - ending finished goods inventory - overapplied manufacturing overhead.

You have been provided the following information by the cost accounting department for the period: -ending finished goods inventory -overapplied manufacturing overhead -beginning finished goods inventory What piece of information is missing from the above information that is required to determine the adjusted cost of goods sold for the period?

Overapplied overhead

_________means that too much has been charged to cost of goods sold, so the amount of overapplication would have to be subtracted to get to the right number.

Cost of Goods Sold: Direct materials inventory, beginning balance 85,000 Direct materials purchased 355,000 Total direct materials available 440,000 Direct materials inventory, ending balance (60,000) Raw materials used in production 380,000 Direct labor costs 260,000 Applied manufacturing overhead costs 250,000 Total manufacturing costs 890,000 Work-in-process inventory, beginning balance 150,000 Work-in-process inventory, ending balance (125,000) Cost of goods manufactured 915,000 Finished goods inventory, beginning balance 100,000 Finished goods inventory, ending balance (140,000) Unadjusted cost of goods sold 875,000 Plus underapplied manufacturing overhead 34,000 Adjusted cost of goods sold 909,000

he data for a company for the year are as follows: Direct materials purchased 355,000 Actual manufacturing overhead costs 284,000 Direct labor costs 260,000 Direct materials inventory, beginning balance 85,000 Work-in-process inventory, beginning balance 150,000 Applied manufacturing overhead costs 250,000 Finished goods inventory, ending balance 140,000 Direct materials inventory, ending balance 60,000 Work-in-process inventory, ending balance 125,000 Finished goods inventory, beginning balance 100,000 What is the adjusted cost of goods sold?