SB 1 & 2
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000
$260,000 Reason: Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000
Given the following, compute the cost of goods manufactured. Direct material cost: $40,000, Direct labor cost: $100,000, Applied overhead: $120,000, Actual overhead: $130,000; Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000.
$278,000 Reason: $30,000 + $40,000 + $100,000 + $120,000 - $12,000 = $278,000
Given: Cost of goods completed of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.
$395,000 Reason: $110,000 + $410,000 - $125,000 = $395,000.
Given the following, calculate total current 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: $62,000 + $78,000 + $46,000 = $186,000. Adjust for work in process when calculating the cost of goods manufactured.
Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Actual overhead was $50,000; Beginning work in process inventory was $27,000; and Ending work in process inventory was $25,000. Calculate the cost of goods manufactured.
$208,000 Reason: $27,000 + ($66,000 + $80,000 + $60,000) - $25,000 = $208,000
Given: Cost of goods completed of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.
$228,000 Reason: $18,000 + $234,000 - $24,000 = $228,000
Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?
$65,000
The Sarbanes-Oxley (SOX) Act focuses on three factors that affect the accounting reporting environment:
Blank 1: opportunity or opportunities Blank 2: incentives or incentive Blank 3: character
There are two broad classifications of costs: manufacturing costs and____costs.
Blank 1: period, support, nonmanufacturing, non manufacturing, or non-manufacturing
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the Blank______.
estimated total cost driver
The formula for a predetermined overhead rate is Blank______.
estimated total manufacturing overhead cost ÷ estimated total cost driver
A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record Blank______.
factory utilities expense rent expense on factory equipment
The continuous, ongoing cycle of management functions include Blank______.
planning, implementing, and controlling
The formula for applying overhead to a specific job is Blank______.
predetermined overhead rate × the actual cost driver usage for the specific job
Calculating the predetermined overhead rate is the Blank______ step in assigning manufacturing overhead costs.
second
Nonmanufacturing costs increase Blank______.
the Selling, General & Administrative expense accounts
A journal entry that debits Work in Process inventory and credits Manufacturing Overhead is recording Blank______.
the application of manufacturing overhead costs
Differential cost is Blank______.
the difference in cost between two alternatives
When actual manufacturing overhead costs are incurred, Blank______.
the manufacturing overhead cost is debited
Overhead costs are debited to Work in Process when Blank______.
they are applied to jobs
Given the following, calculate total current 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
Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Actual overhead was $50,000; Beginning work in process inventory was $27,000; and Ending work in process inventory was $25,000. Calculate the cost of goods manufactured.
$208,000
Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?
$65,000 Reason: ($20,000 + $40,000 + $30,000) + $0 - $25,000 = $65,000
Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?
65,000
The first step in assigning manufacturing overhead is to determine the __________ _________ or cost driver.
Blank 1: allocation Blank 2: base
Because service firms tend to be labor-intensive, the primary driver used to assign cost is
Blank 1: billable Blank 2: hours
A cost that will not influence a decision is a(n)
Blank 1: irrelevant or sunk
Hotels and airlines are examples of _______companies.
Blank 1: service
he job cost sheet serves as a(n)______ _____to Work in Process Inventory Account.
Blank 1: subsidiary Blank 2: ledger
Providing managers with a broader set of information to meet the needs of multiple stakeholders, with the goal of ensuring the company's long-term survival in an uncertain and resource-constrained world is the goal of _____ , accounting.
Blank 1: sustainability or sustainable
The three V's that make data big are
Blank 1: volume Blank 2: velocity Blank 3: variety
Which of the following is not an activity that managers perform on a regular, routine basis?
Budgeting
Which of the following people would be more interested in managerial accounting data than in financial accounting data?
Business owners Employees
Which of the following statements are true?
Classifying a cost as product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.
What two accounts are involved when underapplied or overapplied overhead is disposed of?
Cost of Goods Sold and Manufacturing Overhead
The journal entry to record depreciation on office equipment debits Blank______.
Depreciation Expense and credits Accumulated Depreciation
Managerial accounting and sustainability accounting are interchangeable terms.
False
Companies choose to use predetermined overhead rates based on estimates in order to make costing products easier.
False. Reason: Managers often do not know the actual manufacturing overhead cost until after the month, quarter, or year has ended, too late to make decisions and cost products.
Virtually all accounting and business problems have clear right or wrong answers.
False; Reason: Many situations require accountants and managers to weigh the pros and cons of alternatives before making final decisions.
The cost of jobs that have been completed but not yet sold are contained in
Finished Goods
What is the most common method for disposing of the balance in Manufacturing Overhead?
Making a direct adjustment to Cost of Goods Sold
Which type of firm converts materials into finished products?
Manufacturing
Which account is credited when manufacturing overhead is applied?
Manufacturing Overhead
A company was assessed property taxes of $1,000 on its manufacturing facility. The journal entry to record this is debit Blank______.
Manufacturing Overhead $1,000 and credit Property Taxes Payable $1,000
The journal entry to record $20,000 in depreciation on factory equipment is debit Blank______.
Manufacturing Overhead $20,000 and credit Accumulated Depreciation $20,000
The journal entry to record expired prepaid factory insurance debits Blank______.
Manufacturing Overhead and credits Prepaid Insurance
Which of the following is NOT one of the three categories of businesses?
Nonprofit organization
The journal entry to record the purchase of materials debits Blank______.
Raw Materials Inventory
A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit Blank______.
Raw Materials Inventory $70,000 and credit Accounts Payable $70,000
A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit Blank______.
Raw Materials Inventory $70,000 and credit Accounts Payable $70,000 Reason: Raw materials is debited (increased) by a purchase. Accounts payable is credited because of the increase in a liability.
Which of the following statements are true?
Raw Materials Inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw Materials Inventory account.
Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased. The purchases included $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
Reason: Cost of direct materials = Beginning Inventory + Purchases - Indirect Materials - Ending Inventory ($27,000 + $100,000 - $28,000 - $25,000 = $74,000)
Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased. The purchases included $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
Reason: Cost of direct materials = Beginning Inventory + Purchases - Indirect Materials - Ending Inventory= 16,000
Which of the following statements is true?
Some firms operate as more than one type of organization: manufacturer, merchandiser and/or service company.
Which of the following would NOT be part of direct labor cost?
Supervisor salaries
True or false: Cost control is a critical concern for most organizations.
True Reason: It is true that other things besides costs should be considered in decisions, but cost control remains a critical concern for most organizations.
Which of the following is NOT one of the V's of big data?
Validity
Which account is credited in the journal entry to record labor costs?
Wages payable
When a job is completed, its costs are transferred out of Blank______.
Work in Process
Which account is debited when manufacturing overhead is applied?
Work in Process Inventory
Which account(s) are debited in the journal entry to record manufacturing labor costs?
Work in process inventory and Manufacturing overhead
Unadjusted cost of goods sold consists of Blank______.
actual materials and labor and applied overhead
The most common method for disposing of the balance in Manufacturing Overhead is Blank______.
adjusting Cost of Goods Sold
A journal entry debiting Salaries expense and crediting Salaries and wages payable could record Blank______.
administrative salaries
The journal entry to record general selling and administrative costs is debit Blank______.
an expense account and credit Cash or a payable
The cost of goods manufactured report includes Blank______ manufacturing overhead costs.
applied
Variable costs Blank______.
change in direct proportion to some unit of measure can be related to manufacturing or nonmanufacturing activities
Nonmanufacturing costs include Blank______.
company president's salary sales commissions
A journal entry that debits Finished Goods Inventory and credits Work in Process records the Blank______.
completion of a job
Job-order costing would most likely be used in a(n) Blank______.
construction company
Direct labor and manufacturing overhead costs are known as Blank______ costs.
conversion
When making a decision, Blank______.
cost control is a critical concern for most organizations
Cost objects include Blank______.
customers activities anything for which cost data is desired
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to Blank______.
determine the cost driver
Underapplied or overapplied overhead is the Blank______.
difference between overhead applied to jobs and actual overhead
The difference in costs between two alternatives is called a(n) Blank______ cost.
differential
A laptop computer manufacturer would consider the computer's processor chip to be a(n) Blank______ cost.
direct material
Manufacturing costs include ______.
direct materials manufacturing overhead direct labor
The components of prime costs are ______.
direct materials and direct labor
When materials are issued into production, Blank______.
direct materials are recorded in Work in Process direct materials are recorded on the job cost sheet
When materials are issued into production, Blank______.
direct materials are recorded on the job cost sheet direct materials are recorded in Work in Process
A journal entry that involves Manufacturing overhead and Cost of goods sold is recorded to Blank______.
dispose of underapplied or overapplied overhead
Costs are transferred from raw materials inventory to Blank______.
either work in process or manufacturing overhead
Predetermined overhead rates are usually calculated Blank______.
for an entire year
Companies with strong ethical cultures ______.
have higher productivity than those without such cultures have higher levels of customer satisfaction
Decisions such as deciding how many employees to hire, salary schedules, and training policies are made during the Blank______ phase of the management process.
implementation
Decisions made during the ______ phase are sometimes called operational decisions.
implementing
The Sarbanes Oxley Act Blank______.
includes rules that should help employees make ethical decisions
Manufacturing overhead costs include Blank______.
indirect materials, factory supervisors' salaries, and factory depreciation
Companies that use job-order costing Blank______.
make unique products
Actual manufacturing overhead consists of all Blank______.
manufacturing costs other than direct labor and direct materials
Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as Blank______.
manufacturing overhead
Labor costs Blank______.
may be direct or indirect are recorded in basically the same way as material costs
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services
Controlling involves ______.
measuring actual results
A department store is part of the Blank______ companies category of business.
merchandising
The distinction between manufacturing and nonmanufacturing costs applies Blank______.
only to companies that make a physical product
The difference between overhead applied to jobs and actual overhead is Blank______.
overapplied or underapplied overhead
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the Blank______ the job.
overhead applied to
Nonmanufacturing costs incurred during a period are treated as Blank______.
period expenses
A relevant cost Blank______.
pertains to the future differs between alternatives
The future-oriented aspect of the management process is Blank______.
planning
The Sarbanes-Oxley (SOX) Act Blank______.
was primarily aimed at renewing investor confidence has many implications for managers
Managers keep track of how they are doing and determine if adjustments are needed during the phase.
Blank 1: controlling or control
Major inputs such as lumber and fixtures that can be easily traced to a specific job are called
Blank 1: direct Blank 2: materials or material
Intended users of_______ accounting information include investors and regulators; business owners and employees are included in the intended users of________ accounting.
Blank 1: financial or external Blank 2: managerial, management, or internal
The document record that summarizes the costs incurred on a specific job, project, or client is called a(n) ____sheet.
Blank 1: job Blank 2: cost
The flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods is summarized on the cost of goods_______ report.
Blank 1: manufactured or completed
Wholesalers and retailers are both types of ______companies.
Blank 1: merchandising, merchandise, merchandiser, or merchant
Costs associated with running a business and selling the product as opposed to making it are called
Blank 1: nonmanufacturing or period