Chapter 2 SmartBook
What name is given to a record of all costs that relate to a particular job?
Job cost sheet
Which account is credited when manufacturing overhead is applied?
Manufacturing Overhead
The journal entry to record $20,000 in depreciation on factory equipment is debit ____________.
Manufacturing Overhead $20,000 and credit Accumulated Depreciation $20,000
The first step in assigning manufacturing overhead is to determine the ________ _________ or cost driver.
allocation base
When a job is completed, which account is credited?
Work in process Inventory
Which account(s) are debited in the journal entry to record manufacturing labor costs?
Work in process inventory and Manufacturing overhead
A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ____________.
administrative salaries
The journal entry to record general selling and administrative costs is debit ____________.
an expense account and credit Cash or a payable
On the job cost sheet and work in process accounts, the ____________ manufacturing overhead is recorded.
applied
Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ____________.
as the costs are applied to jobs
Because service firms tend to be labor-intensive, the primary driver used to assign cost is ________ ________.
billable hour
The most common driver used to assign costs in a service firm is ____________.
billable hours
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______________.
determine the cost driver
Underapplied or overapplied overhead is the ____________.
difference between overhead applied to jobs and actual overhead
Major inputs such as lumber and fixtures that can be easily traced to a specific job are called __________ __________.
direct materials
A journal entry that involves Manufacturing overhead and Cost of goods sold is recorded to ____________.
dispose of underapplied or overapplied overhead
Costs are transferred from raw materials inventory to ____________.
either work in process or manufacturing overhead
The document record that summarizes the costs incurred on a specific job, project, or client is called a(n) __________ _________ sheet.
job cost
Companies that use job-order costing ____________.
make unique products
Actual manufacturing overhead consists of all ____________.
manufacturing costs other than direct labor and direct materials
Factory labor charges that cannot be easily traced to a job are recorded as ____________.
manufacturing overhead
An allocation base is a(n) ____________.
measure of activity used to assign overhead costs to products and services
The difference between overhead applied to jobs and actual overhead is ___________.
overapplied or underapplied overhead
Nonmanufacturing costs incurred during a period are treated as ____________.
period expenses
All materials that will be used in future production are first recorded in the ________ ________ Inventory account.
raw materials
Calculating the predetermined overhead rate is the ____________ step in assigning manufacturing overhead costs.
second
Nonmanufacturing costs increase ____________.
the Selling, General & Administrative expense accounts
A journal entry that debits Work in Process inventory and credits Manufacturing Overhead is recording ____________.
the application of manufacturing overhead costs
When actual manufacturing overhead costs are incurred, ____________.
the manufacturing overhead cost is debited
The journal entry to record the purchase of materials debits ____________.
Raw Materials Inventory
A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit ____________.
Raw Materials Inventory $70,000 and credit Accounts Payable $70,000
Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased. The purchases included $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$16,000
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. The purchases included $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
Which of the following statements are true?
-Raw Materials Inventory represents the cost of materials not yet used in production. -When materials are purchased they are recorded in the Raw Materials Inventory account.
Labor costs ____________.
-are recorded in basically the same way as material costs -may be direct or indirect
When materials are issued into production, ____________.
-direct materials are recorded on the job cost sheet -direct materials are recorded in Work in Process
A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ____________.
-factory utilities expense -rent expense on factory equipment
What two accounts are involved when underapplied or overapplied overhead is disposed of?
Cost of Goods Sold and Manufacturing Overhead
When a job is completed, its costs are transferred into ____________.
Finished Goods
When a job is completed, which account is debited?
Finished Goods Inventory
Which of the following would most likely NOT be classified as a direct material?
Nails and screws
Which account is credited in the journal entry to record labor costs?
Wages payable
When a job is completed, its costs are transferred out of ____________.
Work in Process
A journal entry that debits Finished Goods Inventory and credits Work in Process records the ____________.
completion of a job
Job-order costing would most likely be used in a(n) ____________.
construction company
Overhead costs are debited to Work in Process when ____________.
they are applied to jobs