ACC 202 CH 3 MSU

Corp. sold goods costing 50K for 75K. Journal entries to be made could include debiting

COGS for 50K AR for 75K

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

The incurrence of direct labor costs should be recorded by debiting

Work in process account

Overhead is underapplied if

actual overhead is more than applied overhead

Actual manufacturing overhead costs are recorded in the Manufacturing overhead account

as they are incurred

raw materials is a

asset account

Corp. recognized 1k of accrued property taxes on its manufacturing facility. The journal entry should read

debit 1k to manufacturing overhead and credit property taxes 1k

Underapplied overhead results in a

debit balance

Journal entry to record expired prepaid insurance on factory equipment is

debit manufacturing overhead and credit prepaid insurance

If overapplied overhead is close out to COGS, the COGS account will be

decreased

A journal entry that debits manufacturing overhead and credits accumulated depreciation records

depreciation on the factory equipment

to calculate total manufacturing costs, add

direct materials, direct labor and applied manufacturing overhead

Period costs are recorded as expenses as incurred and

do not flow through the inventory accounts

Cost of jobs still unfinished at the end of of a period are included in

ending Work in Process inventory

Predetermined over rate formula

estimated manufacturing overhead cost divided by estimated allocation base

Manufacturing overhead costs include

factory insurance supervisors salary

Sales minus cost of goods sold equals

gross margin

Selling and administrative costs first appear on the

income statement

Labor costs charges to manufacturing overhead represent

indirect labor costs

When overhead is applied to Work in Process

manufacturing overhead is credited

When actual overhead is incurred

manufacturing overhead is debited

Applied manufacturing overhead will most likely ____actual manufacturing overhead

not equal

The difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that

one debits depreciation expense, while the other debits manufacturing overhead

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

only direct labor costs

A credit balance in the manufacturing overhead account means overhead was

overapplied

the difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

Actual overhead costs may not be proportional to the actual amount of the allocation base used because

overhead spending may not be under control many actual overhead costs are fixed

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

raw materials

Net operating income is calculated by subtracting

selling and administrative expenses from gross margin

A journal entry that debits advertising expense and credits cash would record the incurrence of a

selling cost

When calculating the cost of direct materials on the schedule of costs of goods manufactured, the cost of indirect materials is,

subtracted from raw materials used in production

The value of work in process is equal to

the cost of all unfinished jobs

Underapplied or overapplied overhead is

the difference between overhead applied to work in process and actual overhead

Work in Process consists of

Actual direct materials cost Actual direct labor cost applied manufacturing overhead

Which costs are charged directly to the income statement?

Administrative costs Selling costs

What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

Allocate it to Work in Process, Finished Goods and COGS Close it to COGS

Which of the following appears on a job cost sheets and in the work in process account?

Applied manufacturing overhead

The journal entry to record the purchase of materials debits

Raw materials

Which account is debited to record direct labor costs?

Salaries and wages payable

Which of the following are charged directly to the income statement?

Selling costs Administrative costs

The_____side is always used to record the actual manufacturing costs incurred

debit

Which of the following are used to calculate the Cost of Goods Available For Sale on the schedule of COGS?

Beginning finished goods inventory costs of goods manufactured

Cost of direct materials

Beginning inventory+purchases-indirect materials-ending inventory

Which of the following are used to calculate Cost of Goods Available For Sale on the schedule of COGS?

Cost of goods manufactured beginning finished goods inventory

When a job is completed, its costs are transferred into

Finished Goods

The journal entry to record the more accurate allocation of overapplied or underapplied overhead entries to

Finished goods Work in Process COGS Manufacturing overhead

When the period ends

Manufacturing overhead is closed

Units of product that are only partially complete are contained in the

Work in Process inventory

the cost of goods _____is the sum of all amounts transferred for Work in process to Finished goods during a period

completed

Finished goods consists of

completed unsold goods

The_____side of the manufacturing overhead account is always used to record manufacturing overhead applied to production

credit

When overhead is underapplied, a _____must be made to the Manufacturing overhead account to close it out

credit