accounting 202 chapter 3 learnsmart
a journal entry debiting cost of goods sold and crediting finished goods is made when
goods are sold
net operating income is calculated by subtracting _____ from _____
selling and administrative expenses; gross margin
the schedule of cost of goods _____ summarizes costs that remain in finished goods inventory and that have been transferred to cost of goods sold
sold
t/f underapplied or overapplied overhead occurs bc overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels
true
a journal entry that debits raw materials and credits accounts payable is recording the
purchase of materials
a journal entry that debits advertising expense and credits cash would record the incurrence of a
selling cost
the amount transferred from work in process to finished goods is
cost of goods manufactured
raw materials is a ______ account
asset
when calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is
subtracted from raw materials used in production
when preparing financial statements in a job-order costing system, finished goods flow first to the ____ ___ and then to the ___ ___
-balance sheet -income statement
what methods can be used to dispose of underapplied or overapplied manufacturing overhead?
-closing it out to cost of goods sold -allocating it among work in process, finished goods and cost of goods sold
which of the following are used to calculate cost of goods available for sale on the schedule of cost of goods sold
-cost of goods manufactured -beginning finished goods inventory
which of the following costs would be classifieds manufacturing overhead?
-factory rent -factory maintenance wages -factory utilities
a journal entry that debits manufacturing overhead and credits accounts payable could be made to record:
-factory utilities expense -rent expense on factory equipment
manufacturing overhead consists of all
-manufacturing costs other than direct labor and direct materials
actual overhead may not be proportional to the actual amount of the allocation based used bc
-overhead spending may not be under control -many actual overhead costs are fixed
a journal entry that debits manufacturing overhead and credits accounts payable could be made to record:
-rent expense on factory equipment -factory utilities expense
which of the following costs are charged directly to the income statement
-selling costs -administrative costs
manufacturing overhead costs include
-the factory supervisor's salary -factory insurance
which are true statements
-when materials are purchased they are recorded in the raw materials inventory account -raw materials inventory represents the cost of materials not yet used in production
the journal entry to record the purchase of materials credits
accounts payable
overhead is overapplied if
actual overhead is less than applied overhead
overapplied or underapplied overhead is the difference between
actual total overhead and total overhead applied
to calculate the adjusted cost of goods sold:
add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold
the more accurate method of closing out the balance in manufacturing overhead is:
allocating it among work in process, finished goods and cost of goods sold
which side of the manufacturing overhead account if actual manufacturing overhead entered on?
always the debit side
a simpler method of closing out the balance of manufacturing overhead is
closing it out to cost of goods sold
finished goods
consist of completed, unsold goods
gross margin is calculated by subtracting _____ from ______
cost of goods sold;sales
when overhead is underapplied, a _______ must be made to the manufacturing overhead account to close it out
credit (debiting would be appropriate if overhead were overapplied)
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
a journal entry that debits manufacturing overhead and credits accumulated depreciation records
depreciation on factory equipment
underapplied or overapplied overhead is the
difference between overhead applied to work in process and actual overhead
a journal entry that includes manufacturing overhead and cost of goods sold is recorded to
dispose of underapplied or overapplied overhead
the cost of jobs still unfinished at the end of a period are included in
ending work in process inventory
a predetermined overhead rate is calculated by dividing the _____ total manufacturing overhead by the ____ total amount of the allocation base
estimated;estimated
t/f period costs flow from finished goods to cost of goods sold
false
t/f period costs flow from finished goods to cost of goods sold
false
t/f actual overhead costs appear in the work in process account but not on the job cost sheet
false -applied, not actual overhead, costs appear in both the work in process account and the job cost sheet
when a job is completed, which account is debited
finished goods
when a job is completed, which account is debited?
finished goods
when jobs are sold their costs are transferred out of
finished goods
the journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ____ and credits cash
insurance expense
the cost of goods _____ is the sum of all amounts transferred from work in process to finished goods during a period
manufactured
the schedule of cost of goods ____ summarizes costs that remain in work in process inventory and that have been transferred from work in process to finished goods inventory
manufactured
the journal entry to record expired prepaid factory insurance debits
manufacturing overhead and credits prepaid insurance
the journal entry to record accrued property taxes for a factory building debits
manufacturing overhead and credits property taxes payable
applied manufacturing overhead will most likely ______ actual manufacturing overhead
not equal
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
any purchased materials that will go into the finished product are first recorded in the _____ ____ inventory account
raw materials
the journal entry to record issuing materials to be used in production credits
raw materials
the journal entry to record the purchase of materials debits
raw materials
a journal entry that debits manufacturing overhead and credits property taxes payable records the
recognition of accrued property taxes
the journal entry to record labor costs credits
salaries and wages payable
the value of work in process is equal to
the cost of all unfinished jobs
Cost of Goods Manufactured
the manufacturing costs associated with the goods that were finished during the period
units of product that are only partially complete are contained in the _________ ________ ______ inventory
work in process
when a job is completed, the job costs are transferred out of
work in process
when a job is completed, which account is credited
work in process
which account is debited to record direct labor costs
work in process
which accounts are debited in the journal entry to record manufacturing labor costs
work in process and manufacturing overhead
when the allocation method is used to close out the underapplied or oversupplied balance remaining in manufacturing overhead, which accounts are affected?
-work in process -finished goods -cost of goods sold
labor costs charged to manufacturing overhead represent
indirect labor costs
when only a portion of the units involved in a job are sold, the
unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold
the ____ side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the _____ side is always used to record the actual manufacturing costs incurred
-credit -debit
the journal entry to record general selling and administrative costs debits
an expense account and credit cash or a liability
which of the following appears on job cost sheet and in the work in process account
applied manufacturing overhead
actual manufacturing overhead costs are recording in the manufacturing overhead account
as they are incurred
what accounts are debited when goods are sold on account
cost of goods sold and accounts receivable
which two accounts are involved when underapplied or overapplied overhead is closed out using the simpler method
cost of goods sold and manufacturing overhead