smartbook chapter 3

$55,000 gross margin - selling and administrative expenses = net income (loss)

a company reports gross margin of $100,000, cost of goods sold of $70,000, and selling and administrative expenses of $45,000. net operating income (loss) is _________-.

debited

actual manufacturing overhead is _______ to the manufacturing overhead account.

raw materials

include any materials that go into the final product. when used in production as direct materials, their costs are transferred to work in process inventory.

period expenses

selling and administrative costs are incurred as _______.

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

which of the following statements are true?

closing to cost of goods sold is simpler, and allocating is more accurate

which of the statements regarding closing out over or over or underapplied overhead is correct?

purchase of materials

a journal entry that debits raw materials and credits accounts payable is recording the _________.

raw materials

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

schedule of cost of goods manufactured

contains three elements of product costs - direct materials, direct labor, and manufacturing overhead - and it summarizes the portion of those costs that remain in ending work in process inventory and that are transferred out of work in process into finished goods

schedule of cost of goods sold

contains three elements of product costs - direct materials, direct labor, and manufacturing overhead - and it summarizes the portions of those costs that remain in ending finished goods inventory and that are transferred out of finished goods into cost of goods sold

$228,000 beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory = unadjusted cost of goods sold

given: cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.

net operating income

gross margin minus selling and administrative expenses equals _________.

$120,000

job #4620 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 __________.

indirect

labor costs charged to manufacturing overhead represent ________ labor costs.

-factory insurance -the factory supervisor's salary

manufacturing overhead costs include _______.

-factory rent -factory utilities -factory maintenance wages

manufacturing overhead costs include __________.

work in process

manufacturing overhead is applied with a debit to __________.

actual overhead is less than applied overhead

overhead is overapplied if __________.

actual overhead is more than applied overhead

overhead is underapplied if __________.

$74,000 cost of direct materials = beginning inventory + purchases - indirect materials - ending inventory

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.

income statement

selling and administrative costs first appear on the __________.

period expenses

selling and administrative costs incurred are treated as ________.

work in process $10,000 and credits manufacturing overhead $10,000

the journal entry to record $10,000 in manufacturing overhead applied to job #40 debits _______.

raw materials

the journal entry to record the purchase of materials debits ________.

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

the more accurate method of closing out the balance in manufacturing overhead is _________.

sold

the schedule of cost of goods _______ summarizes costs that remain in finished goods inventory that have been transferred to cost of goods sold.

manufactured

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.

closing it out to cost of good sold

the simpler method of closing out the balance of manufacturing overhead is ____________.

true

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

ending finished goods inventory from goods available for sale

unadjusted cost of goods sold is calculated by subtracting _________.

always the debit side

what side of the manufacturing overhead account is actual manufacturing overhead entered on?

finished goods

when a job is completed, its costs are transferred into _______.

subtracted from raw materials used in production

when calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is ________.

only direct

when labor costs are incurred, __________ labor costs are added directly to the work in process account.

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

when only a portion of the units involved in a job are sold, the __________.

manufacturing overhead

which account is credited when manufacturing overhead is applied?