CH.3 Cost Accounting

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

administrative salaries

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

always the debit side

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

only direct

Unadjusted cost of goods sold is calculated by subtracting ______.

ending finished goods inventory from goods available for sale

Labor costs charged to Manufacturing Overhead represent ______ labor costs.

indirect

The journal entry to record accrued property taxes for a factory building debits ______.

manufacturing overhead and credits property taxes payable

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

overapplied or underapplied overhead

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 or produced

The journal entry to record issuing both direct and indirect materials into production debits ______.

work in process and manufacturing overhead

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

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to debit ______.

Manufacturing overhead $8,000 and credit Accounts payable $8,000

Overhead is overapplied if ______.

actual overhead is less than applied overhead

What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

allocate it to work in process, finished goods, an Cost of goods sold close it to cost of goods sold

The journal entry to record the purchase of materials credits ______.

accounts payable

What methods can be used to dispose of underapplied or overapplied manufacturing overhead? -Close it to Cost of goods sold. -Close it to Work in process. -Allocate it to Raw materials, Work in process, and Finished goods. -Close it to Finished goods. -Allocate it to Work in process, Finished goods, and Cost of goods sold.

Close it to Cost of goods sold. Allocate it to Work in process, Finished goods, and Cost of goods sold.

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is ______. Multiple choice question. -subtracted from raw materials used in production -added to raw materials used in production -subtracted from beginning Raw materials inventory -added to beginning Raw materials inventory

subtracted from raw materials used in production

Manufacturing overhead is applied with a debit to ______.

work in process

The simpler method of closing out the balance of Manufacturing overhead is ______.

closing it out to Cost of goods sold

Which of the following statements are true? Multiple select question. 1. Raw materials inventory represents the cost of materials not yet used in production. 2. Raw materials inventory only includes the cost of direct materials. 3. Direct labor costs flow through the Raw materials inventory account. 4. When materials are purchased they are recorded in the Raw materials inventory account.

1. Raw materials inventory represents the cost of materials not yet used in production 4. when materials are purchased they are recorded in the Raw materials inventory account

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

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

allocating it among work in process, finshed goods, and cost of goods sold

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

always the credit side

The journal entry to record selling and administrative salaries debits ______.

an expense account and credits Cash or a liability

Underapplied or overapplied overhead is the ______. -overhead applied to work in process -sum of overhead applied to work in process and actual overhead -actual overhead -difference between overhead applied to work in process and actual overhead

difference between overhead applied to work in process and actual overhead

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______.

direct labor costs

Manufacturing overhead costs include ______. Multiple select question. direct materials the CEO's salary factory insurance the factory supervisor's salary

factory insurance the factory supervisor's salary

Manufacturing overhead costs include ______. Multiple select question. marketing costs assembly worker wages factory utilities factory maintenance wages factory rent

factory utilities factory maintenance wages factory rent

Completed units that have not yet been sold are found in

finished goods

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______

purchase of materials

Any purchased materials that will go into the finished product are first recorded in _______ ________ inventory account.

raw materials

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

Cost of goods manufactured is the ______. Multiple choice question. -sum of all jobs in Finished goods at the end of a period -value of all jobs transferred from Finished goods to Cost of goods sold -average value of the Work in process account -sum of all jobs transferred from Work in process to Finished goods

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

A debit balance in Manufacturing overhead means overhead was (underapplied or overapplied)

underapplied

When only a portion of the units involved in a job are sold, the ______. Multiple choice question. -unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold -cost is held in the finished goods account until all units in the job are sold -unsold units are transferred to another job -entire cost of the job is transferred from finished goods to cost of goods sold

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

Units of product that are only partially complete are contained in ______________ inventory.

work in process

Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

74,000