Chapter 3 Smart book Managerial Accounting

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

Work in

Work in Process consists of ______. (3) - actual direct labor cost - applied direct labor cost - applied direct materials cost - applied manufacturing overhead - actual direct materials cost - actual manufacturing overhead

actual direct labor cost, applied manufacturing overhead, actual direct materials cost

Actual manufacturing overhead is ______ to the Manufacturing overhead account. credited debited

debited

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______. - completion of goods - application of manufacturing overhead - purchase of materials - issuance of materials

issuance of materials

The cost of goods _______ is the sum of all amounts transferred from Work in process to Finished goods during a period.

manufactured

Manufacturing overhead consists of all ______. - indirect costs - manufacturing costs other than direct labor and direct materials - costs other than direct labor and direct materials - manufacturing costs

manufacturing costs other than direct labor and direct materials

Which account is credited when manufacturing overhead is applied? - Cost of goods sold - Work in process - Manufacturing overhead - Accounts payable

manufacturing overhead

Selling and administrative costs incurred are treated as ______. - assets - liabilities - product costs - period expenses

period expenses

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

raw materials

The journal entry to record the purchase of materials debits ______. work in process manufacturing overhead accounts payable raw materials

raw materials

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. - Raw materials inventory only includes the cost of direct materials. - Direct labor costs flow through the Raw materials inventory account.

raw materials inventory represents the cost of materials not yet used in production and when materials are purchased they are recorded in the raw materials inventory account

A journal entry that debits Manufacturing overhead and credits Property taxes payable records the ______. - payment of accrued property taxes - application of manufacturing overhead - recognition of accrued property taxes - application of property taxes

recognition of accrued property taxes

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______. (2) - the purchase of indirect materials - rent on the administrative office - depreciation on factory equipment - rent expense on factory equipment - factory utilities expense

rent expense on factory equipment and factory utilities expense

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

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to ______. - Cost of goods sold only - Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold - Finished goods or allocating it to Work in process, Finished goods, and Raw materials -Finished goods only

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

The Manufacturing Overhead account is debited when ______. - overhead is applied to Work in Process - goods are completed - actual overhead costs are incurred

actual overhead are incurred

Overhead is overapplied if ______. - adjusted cost of goods sold is more than unadjusted cost of goods sold - actual overhead is more than applied overhead - cost of goods manufactured is less than cost of goods sold - actual overhead is less than applied overhead

actual overhead is less than applied overhead

Overhead is underapplied if ______. -actual overhead is more than applied overhead - actual overhead is less than applied overhead - cost of goods manufactured is less than cost of goods sold - adjusted cost of goods sold is less than unadjusted cost of goods sold

actual overhead is more than applied overhead

Which of the following costs are charged directly to the income statement? - Manufacturing overhead - Direct materials - Direct labor - Selling costs - Administrative costs

administrative costs, selling costs

A journal entry that debits Work in process and credits Manufacturing overhead is recording the ______. - incurrence of actual manufacturing overhead - application of manufacturing overhead costs - completion of a job - purchase of indirect materials

application of manufacturing overhead costs

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______. - at the end of the period - as they are incurred - when jobs are completed - as the allocation base is used on a job

as they are incurred

The simpler method of closing out the balance of Manufacturing overhead is ______. - closing it out to Work in process - closing it out to Cost of goods sold - allocating it among Work in process, Finished goods, and Cost of goods sold - closing it out to Finished goods

closing it out to Cost of goods sold

Finished goods ______. - consists of completed, unsold goods - is the same as cost of goods manufactured - consists of goods that have been sold to customers during the period - consists of goods that require additional processing before being sold

consists of completed, unsold goods

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

direct labor costs

Net operating income is calculated by subtracting ______ from ______. - selling and administrative expenses; gross margin - selling and administrative expenses; sales - cost of goods sold; sales - cost of goods sold; gross margin

selling and administrative expenses; gross margin

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

subtracted from raw materials used in production

Cost of goods manufactured is the ______. - 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 in Finished goods at the end of a period - 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 journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______. - administrative salaries - maintenance salaries - factory supervisors' salaries - assembly workers' wages

administrative salaries

What side of the Manufacturing overhead account is actual manufacturing overhead entered on? - The credit side, if actual is greater than applied - Always the credit side - Always the debit side - The debit side, if actual is greater than applied

always the debit side

Manufacturing overhead applied to production is always recorded on the ______side of the manufacturing overhead account and the ______side is always used to record the actual manufacturing costs incurred.

credit, debit

Labor costs charged to Manufacturing Overhead represent ______ labor costs. - both direct and indirect labor - indirect - direct

indirect

A credit balance in the Manufacturing Overhead account means overhead was (either overapplied or underapplied)

overapplied

True or false: The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next.

true

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

underapplied

Costs of partially completed units are accounted for in ______. - raw materials - cost of goods manufactured - finished goods - work in process

work in process

When a job is completed, the job costs are transferred OUT OF finished goods work in process cost of goods sold manufacturing overhead

work in process

The journal entry to record issuing both direct and indirect materials into production debits ______. - Work in process and Raw materials - Manufacturing overhead and Raw materials - Work in process and Manufacturing overhead

work in process and manufacturing overhead

The journal entry to record selling and administrative salaries debits ______. - an expense account and credits Cash or a liability - a liability account and credits manufacturing overhead - a liability account and credits an expense account - manufacturing overhead and credits cash or a liability

an expense account and credits cash or a liability

Completed units that have not yet been sold are found in ______ ______ inventory.

finished goods

Selling and administrative costs first appear on the ______. statement of owners' equity statement of cash flows income statement balance sheet

income statement

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______. - completion of goods - purchase of materials - issuance of materials into production - sale of goods

purchase of materials

Which of the statements regarding closing out over or underapplied overhead is correct? - Both methods are equally simple. - Both methods are equally accurate. -Allocating is simpler, and closing to Cost of goods sold is more accurate. -Closing to Cost of goods sold is simpler, and allocating is more accurate

Closing to Cost of goods sold is simpler, and allocating is more accurate.

The journal entry to record accrued property taxes for a factory building debits ______. - Work in process and credits Property taxes payable - Manufacturing overhead and credits accounts payable -Work in process and credits manufacturing overhead - Manufacturing overhead and credits Property taxes payable

manufacturing overhead and credit property taxes payable

When labor costs are incurred, _________ labor costs are added directly to the Work in Process account. - only indirect - both direct and indirect - only direct

only direct

When only a portion of the units involved in a job are sold, the ______. - 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 - unsold units are transferred to another job - cost is held in the finished goods account until all units in the job are sold

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