ACC 202 Chapter 2

Costs of partially completed units are accounted for in ______.

work in process

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

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.

ending raw materials inventory and indirect materials used

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.

estimated total cost driver

The formula for a predetermined overhead rate is ______.

estimated total manufacturing overhead cost / estimated total cost driver

An allocation base is a(n) ______.

measure of activity used to assign overhead costs to products and services

When actual manufacturing overhead costs are incurred, ______.

the manufacturing overhead cost is debited

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, including $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

Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000

$186,000

Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Beginning work in process inventory was $27,000; and Ending work in process inventory was $25,000. Calculate the cost of goods manufactured.

$208,000

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000

$260,000

Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?

$65,000

The cost of jobs that have been completed but not yet sold are contained in _____ _____ Inventory.

Blank 1: Finished or Finish Blank 2: Goods or Good

All materials that will be used in future production are first recorded in the _____ _____ Inventory account.

Blank 1: Raw Blank 2: Materials or Material

The first step in assigning manufacturing overhead is to determine the _____ _____ or cost driver.

Blank 1: allocation Blank 2: base

Because service firms tend to be labor-intensive, the primary driver used to assign cost is _____ _____.

Blank 1: billable Blank 2: hours

Major inputs such as lumber and fixtures that can be easily traced to a specific job are called _____ _____

Blank 1: direct Blank 2: materials or material

The cost of goods report summarizes the flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods.

Blank 1: manufactured or completed

Cost of goods is the total cost of jobs completed during the period.

Blank 1: manufactured, completed, or finished

True or false: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process.

False

When a job is completed, its costs are transferred into ______.

Finished Goods

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

Make a direct adjustment to Cost of Goods Sold Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold

What is the most common method for disposing of the balance in Manufacturing Overhead?

Making a direct adjustment to Cost of Goods Sold

Which of the following would most likely NOT be classified as a direct material?

Nails and screws

What is the formula for applying overhead to a specific job?

Predetermined overhead rate × the actual cost driver usage for the specific job

When materials are purchased they are first recorded in the ______ account.

Raw Materials Inventory

Which of the following is not a manufacturing cost category?

Selling & administrative costs

Which of the following statements are true?

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.

When a job is completed, its costs are transferred out of ______.

Work in Process

The most common method for disposing of the balance in Manufacturing Overhead is ______.

adjusting Cost of Goods Sold

On the job cost sheet and work in process accounts, the ______ manufacturing overhead is recorded.

applied

The cost of goods manufactured report includes ______ manufacturing overhead costs.

applied

Labor costs ______.

are recorded in basically the same way as material costs may be direct or indirect

Predetermined overhead rates are ______.

based on some secondary allocation measure

The most common driver used to assign costs in a service firm is ______.

billable hours

Finished goods ______.

consists of completed, unsold goods

The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______.

cost of goods manufactured

When goods are sold to customers, ______.

costs are transferred from Finished Goods to Cost of Goods Sold

Categories of manufacturing costs include ______.

direct materials manufacturing overhead direct labor

When materials are requisitioned into production, ______.

direct materials are recorded on the job cost sheet direct materials are recorded in Work in Process

Costs are transferred from raw materials inventory to ______.

either work in process or manufacturing overhead

A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total cost driver.

estimated; estimated

Ideally an allocation base should ______.

explain or influence the amount of overhead incurred

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 treated as ______.

manufacturing overhead

The difference between overhead applied to jobs and actual overhead is ______.

overapplied or underapplied overhead

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.

overhead applied to

Nonmanufacturing costs incurred during a period are treated as ______.

period expenses

The balance of work in process inventory may be calculated by ______.

summing the costs of all jobs in process

Nonmanufacturing costs increase ______.

the Selling, General & Administrative expense accounts

In a job-order costing system costs flow first to ______.

the inventory accounts and then to cost of goods sold

Direct costs are ______ to products, and overhead costs are ______.

traced; applied

Costs are transferred out of Finished Goods inventory ______.

when goods are sold