ACCT chapter 3 and 5

finding net income/ loss formula

sales -COGS =GM -operating(period) expenses =NI

When companies incur selling and administrative costs, those costs ________. multiple choice should be treated as product costs do not flow through the three inventory accounts should flow through the Manufacturing Overhead account should flow through the Work in Process account

B

Raw Material Inventory cost flow

left side: Beg raw material DM purchased Indirect material purchased =Ending raw material right side: DM used Indirect material used

debit in manu OH means

underapplied

OH applied JE

(d) WIP Inventory (c) Manufacturing OH

when DIRECT labor is recorded

(d) WIP inventory (c) cash/wages payable

when raw materials are USED in production (direct m)

(d) WIP inventory (c) raw material inventory

Finished Goods inventory Cost flow

Left side: Beg FG Inventory Cost of Goods COG(M)/completed =Ending FG inventory Right side: COGS

All of the following are product costs except ________. multiple choice manufacturing overhead costs raw materials sales commissions direct labor

c

when raw materials are USED in production (indirect m)

(d) manufacturing OH (c) Raw material inventory

When raw materials/ direct (or indirect) are purchased

(d)Raw materials inventory (c)cash/accounts payable

Which of the following statements about manufacturing overhead costs is not correct? multiple choice All manufacturing costs other than direct materials and direct labor are classified as manufacturing overhead costs. All manufacturing costs other than direct materials and direct labor are entered directly into the Manufacturing Overhead account. Depreciation on factory equipment is recorded with a debit to Depreciation Expense. Manufacturing overhead costs are recorded with a debit to Manufacturing Overhead account as they are incurred.

c

WIP Inventory cost flow

left side: Beg WIP inventory +DM USED +DL COST +OH APPLIED = Ending WIP Inventory Right side: COGS Completed (COGM)

manufacturing OH cost flow

left side: actual OH =underapplied right side applied OH =overapplied

manu OH underapplied vs. overapplied, COGS

(d) COGS (c) Manu OH

ending WIP formula

Beg costs + DM USED + DL USED + OH APPLIED = Ending WIP

Which of the following occurs when finished jobs are shipped to customers? multiple choice Debit to Cost of Goods Sold. Debit to Finished Goods. Debit to Work in Process. Credit to Raw Materials.

A

Which of the following occurs when manufacturing overhead is applied to Work in Process? multiple choice Debit to Cost of Goods Sold. Debit to Manufacturing Overhead. Credit to Work in Process .Credit to Manufacturing Overhead. Correct

D

Which of the following statements about processing costing is false? multiple choice Process costing accumulates costs by department .Process costing assigns departmental costs uniformly to all identical units that pass through the department during a period .Process costing systems compute unit costs by department. Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.

D

Total costs formula

DM USED + DL USED + OH APPLIED

Which of the following occurs when a job has been completed and transferred to the finished goods warehouse? multiple debit to Cost of Goods Manufactured. Debit to Cost of Goods Sold. Credit to Finished Goods. Credit to Work in Process

d

DEAD CLEAR

debits increase expenses, assests, and divs credits increase liability equity and revenue

when indirect labor is recorded

(d) manufacturing OH (c) cash/wages payable

Which of the following best describes the journal entry to record the use of direct and indirect labor in production? multiple choice Debit Work in Process and credit Salaries and Wages Payable. Debit Work in Process, debit Manufacturing Overhead, and credit Direct Labor .Debit Work in Process, debit Manufacturing Overhead, and credit Salaries and Wages Payable. Debit Manufacturing Overhead and credit Salaries and Wages Payable.

c

Which of the following best describes the journal entry to record the withdrawal of raw materials from the storeroom for use as direct and indirect materials in production? multiple choice Debit Work in Process and credit Raw Materials. Debit Work in Process, debit Manufacturing Overhead, and credit Direct Materials. Debit Work in Process, debit Manufacturing Overhead, and credit Raw Materials. Debit Manufacturing Overhead and credit Raw Materials.

c