Chapter 3 Learnsmart

Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of underapplied or overapplied overhead would:

Credit manufacturing overhead $5,000

When a job is completed, which account is credited?

Work in process

A journal entry that debits finished goods and credits work in process records the:

completion of a job

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

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to cost of goods sold for the sale of 600 of the units is:

$120,000

Costs of goods manufactured: $410,000 Beginnng finished goods inventory: $110,000 Ending finished goods inventory: $125,000 Calculate unadjusted cost of goods sold.

$395,000

Recognition of accrued property taxes

A journal entry that debits manufacturing overhead and credits property taxes payable records the:

Overhead is applied if:

actual overhead is less than applied overhead

The journal entry to record depreciation on office equipment debits

depreciation expense and credits accumulated depreciation

A journal entry that debits Depreciation expense and credits accumulated depreciation records:

depreciation on office equipment

Underapplied or overapplied overhead is the:

difference between overhead applied to work in process and actual overhead

When labor costs are incurred, ____________ are added directly into the work in process account.

only direct labor costs

A journal entry that debits raw materials and credits accounts payable is recording the:

purchase of materials

The journal entry to record the purchase of materials debits:

raw materials

Gross margin is calculated by

Cost of goods sold - sales = Gross margin

The cost of jobs still unfinished at the end of the period are included in:

ending work in process inventory

The journal entry to record general selling and administrative costs debits:

An expense account and credit cash or liability

When goods are sold on account, what accounts are credited?

Finished goods and sales

A journal entry that debits manufacturing overhead and credits accounts payable could not record the incurrence of:

direct labor costs

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

The journal entry to record the purchase of materials credits:

Accounts payable

The more accurate method of closing out the balance in Manufacturing overhead is:

Allocating it among work in process, finished goods and COGS

Underapplied or overapplied manufacturing overhead can be disposed of by:

Closing it out to cost of goods sold or allocating it among work in process, finished goods and cost of goods sold.

Actual manufacturing overhead costs are recorded in the manufacturing overhead account:

as they are incurred

A debit balance in manufacturing overhead means overhead was ____________.

underapplied

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 journal entry to record the issuance of direct materials into production debits:

Work in process

The difference between overhead applied to work in process and actual overhead is:

over or underapplied overhead

Is actual manufacturing overhead debited or credited to the manufacturing overhead account?

Debited

True or False: Actual overhead costs appear in the Work in Process account but not in the job cost sheet.

False

When a job is completed, its costs are transferred into ___________.

Finished goods

Labor costs charged to manufacturing overhead represent

indirect labor costs

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

Given the following, calculate total 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 Direct Material + Direct Labor + Manufacturing Overhead Applied

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

- Administrative Costs - Selling Costs

Which of the following are used to calculate Cost of goods available for sale on the schedule of costs of goods sold?

- Beginning finished goods inventory - Cost of goods manufactured

Manufacturing overhead costs include:

- Factory supervisor salary - Factory insurance

Which of the following costs would be classified as manufacturing overhead? - Factory utilities - Factory Rent - Assembly wages - Factory maintanence wages - Marketing Costs

- Factory utilities - Factory Rent - Factory maintanence wages

The manufacturing overhead account is debited when:

Actual overhead costs are incurred

The journal entry to record depreciation on factory equipment debits:

Manufacturing overhead and credits accumulated depreciation

The journal entry to record expired prepaid factory insurance debits:

Manufacturing overhead and credits prepaid insurance

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

The value of work in process is equal to:

The cost of all unfinished jobs

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

- Overhead spending might 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 material - Factory utilities expense

When jobs are sold their costs are transferred out of:

Finished goods

A journal entry that involves manufacturing overhead, work in process, finished goods and cost of goods sold is recorded to:

dispose of underapplied or overapplied overhead

A journal entry that debits work in process and credits manufacturing overhead is recording the:

Application of manufacturing overhead costs