AC 361 Chapter 3
What side of the manufacturing overhead account is actual manufacturing overhead entered on?
always the debit side
Raw materials is a(n) __________ account.
asset
To calculate direct materials on the schedule of cost of goods manufactured, ass purchases to beginning raw materials inventory and subtract __________.
ending raw materials inventory and indirect materials used
When a job is completed, which account is debited?
finished goods
When jobs are sold their costs are transferred out of:
finished goods
Sales minus cost of goods sold equals:
gross margin
Cost of goods manufactured:
includes the manufacturing costs of goods finished during the period
Labor costs charged to manufacturing overhead represent:
indirect labor costs
The schedule of cost of goods __________ summarizes costs that remain in work in process inventory and that have been transferred out of work in process to finished goods inventory
manufactured
Which of the following is a clearing account?
manufacturing overhead
The journal entry to record $1,000 in expired prepaid insurance on factory equipment is debit:
manufacturing overhead $1,000 and credit prepaid insurance $1,000
The journal entry to record depreciation on factory equipment debits:
manufacturing overhead and credits accumulated depreciation
All purchased materials that will go into the finished product are first recorded in the __________ __________ inventory account.
raw materials
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
Cost of goods manufactured is the:
sum of all jobs transferred from work in process to finished goods
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
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 to the work in process account.
only direct labor costs
Work in process consists of:
- actual direct materials cost - actual direct labor cost - applied manufacturing overhead
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
Finished goods __________.
consists of completed, unsold goods
A journal entry that debits manufacturing overhead and credits accounts payable could be made to record:
- factory utilities expense - rent expense on factory equipment