Managerial Accounting - Chapter 3

For the month of October, Janus Corporation used $30,000 worth of direct materials in production and incurred direct labor costs of $60,000. Actual manufacturing overhead costs were $40,000, whereas $45,000 was the manufacturing overhead applied to work in process. What is the amount of total manufacturing costs that would appear in the Schedule of Cost of Goods Manufactured for October?

$135,000 * $30,000 + $60,000 +$45,000

Vogel Corporation's cost of goods manufactured last month was $136,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $48,000. Overhead was overapplied by $6,000. Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the cost of goods available for sale o the schedule of cost of goods sold?

$171,000 * 35,000 + 136,000

Zimmer, Inc. started the month of January with beginning finished goods inventory of $20,000. The cost of goods manufactured during the month was $120,000 and the ending finished goods inventory was $50,000. What is the unadjusted cost of goods sold for January?

$90,000 * $20,000 + $120,000 = $140,000 $140,000 - $50,000 = $90,000

What occurs when manufacturing overhead is applied to work in process:

Credit to manufacturing overhead

What occurs when finished jobs are shipped to customers:

Debit cost of goods sold

During July at Leob Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a:

Debit to work in process of $79,000 Explanation: Work in process - Debit - 79,000 Manufacturing overhead - Debit - 4,000 Raw materials - credit - 83,000

What best describes the journal entry to record the withdrawal of raw materials from the storeroom for use as a direct and indirect materials in production:

Debit work in process, debit manufacturing overhead, and credit raw materials.

What is the journal entry to record the use of direct and indirect labor in production:

Debit work in process, debit manufacturing overhead, credit salaries and wages payable

The journal entry to record applying overhead during the production process is:

Work in process --> Debit: xxxx Manufacturing overhead --> Credit: xxxx

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

completed during the period

What is the journal entry to record the direct and indirect labor costs incurred during the year:

work in process - debit - xxx manufacturing overhead - debit - xxx wages payable or cash - credit - xxx

Cost of goods manufactured $1,486,000 Cost of goods sold $1,337,000 The journal entry to record the transfer of completed goods from work in process to finished goods is:

Finished goods - debit - 1,486,000 Work in process - credit - 1,486,000

The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: The cost of goods manufactured was:

Finished goods column / second number on debit side 22.250

The following information is available for the current year ending December 31: Manufacturing overhead applied $150,000 Actual amount of manufacturing overhead costs $120,000 What is the balance of the manufacturing overhead account and is overhead under or over applied at the end of the year?

$30,000 - overapplied * 150,000 - 120,000

Transactions debit / credit examples: 1. Direct materials are issued into production for a certain job 2. Salary of the production supervisor payable 3. Lubricating oil, waste cotton, and solder are used in the factory 4. The wages of direct laborers who worked on a particular job are payable 5. Manufacturing overhead is applied to jobs using a predetermined overhead rate

1. Debit: work in process / Credit: Raw materials 2. Debit: Manufacturing overhead / Credit: Salaries and wages payable 3. Debit: Manufacturing overhead / Credit: Raw materials 4. Debit: work in process / Credit: salaries and wages payable 5. Debit: work in process / Credit: manufacturing overhead

The following information is available for the current year ending December 31: Manufacturing overhead applied $150,000 Actual amount of manufacturing overhead costs $120,000 Work in process: $37,500 - 25% Finished goods: $52,500 - 35% Cost of goods sold: $60,000 - 40% Total overhead applied: $150,000 - 100% 1. If the manufacturing overhead account is closed to cost of good sold, the related entry will: 2. If the manufacturing overhead account is closed proportionally to work in process, finished goods, and cost of goods sold, the related entry will include a:

1. Decrease the cost of goods sold by $30,000 * 150,000 - 120,000 2. Credit to cost of goods sold for $12,000 * 30,000 x 40%

Cost of goods manufactured =

Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory - Ending work in process inventory

When companies incur selling and administrative costs, these costs:

Do not flow through the three inventory accounts.

Larned Corporation recorded the following transactions for the just completed month: a. $90,000 in raw materials were purchased on account b. $88,000 in raw materials were used in production. Of this amount, $75,000 was for direct materials and the remained was for indirect materials c. Total labor wages of $125,000 were paid in cash. Of this amount, $102,800 was for direct labor and the remained was for indirect labor. d. Depreciation expense of $191,000 was incurred on factory equipment Record the transactions in journal entries:

a. Raw materials - debit - 90,000 / accounts payable - credit - 90,000 b. work in process - debit - 75,000 / manufacturing overhead - debit - 13,000 / raw materials - credit - 88,000 (88,000 - 75,000 = 13,000) c. work in process - debit - 102,800 / manufacturing overhead - debit - 22,200 / cash - credit - 125,000 (125,000 - 102,800 = 22,200) d. manufacturing overhead - debit - 191,000 / accumulated depreciation - credit - 191,000

In the schedule of cost of goods manufactured and cost of goods sold, the total raw materials available is computed by adding the beginning raw materials inventory and:

purchases of raw materials

Which occurs when a job has been completed and transferred to the finished goods warehouse:

Credit to work in process

What are examples of product costs?

Manufacturing overhead costs, raw materials, and direct labor.

Direct materials cost =

beginning raw materials inventory + raw materials purchases - ending raw materials - indirect materials