Chapter 3 Smart Book Accounting - Grace Giambalvo

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

1. overhead spending may not be under control 2. many actual overhead costs are fixed

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______.

Administrative

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

Debited

George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.

Manufacturing overhead $1,000 and credits Property taxes payable $1,000

Which of the following costs are charged directly to the income statement? Direct Labor Direct Materials Selling Costs Administrative Costs MOH

Selling Costs Administrative Costs

True or false: Underapplied or overapplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels.

True

To calculate total manufacturing costs, add direct materials, direct labor and ______.

applied manufacturing overhead

A journal entry that debits Finished goods and credits Work in process records the ______.

completion of a job

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

only direct

The Manufacturing Overhead account is debited when ______.

actual overhead costs are incurred

Cost of goods manufactured is the ______.

sum of all jobs transferred from Work in process to Finished goods

The journal entry to record the purchase of materials debits ______. Multiple choice question.

raw materials

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______.

as they are inccured

A debit balance in Manufacturing overhead means overhead was _______.

overapplied

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

overapplied or underapplied overhead

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

Given the following, calculate total 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

Meep Industries had unadjusted cost of goods sold of $300,000. Overhead was overapplied by $20,000. Adjusted cost of goods sold is ______.

$280,000

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to ______.

Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold

The journal entry to record a completed job credits ______.

Work in process

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ______.

Work in process $10,000 and credits Manufacturing overhead $10,000

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______. rent on factory equipment miscellaneous factory overhead costs direct labor costs factory utilities costs

direct labor costs Reason: The incurrence of direct labor costs should be recorded by debiting Work in process account.

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

What side of the Manufacturing overhead account is applied manufacturing overhead entered on?

Always the credit side

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

Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000

When overhead is underapplied, a _____ must be made to the Manufacturing overhead account to close it out.

credit

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction debits ______.

Work in process $40,000, debit Manufacturing overhead $30,000 and credit Raw materials $70,000

Work in Process consists of ______.

actual direct labor cost actual direct materials cost applied manufacturing overhead