ACC 213 08 Chapter 3
When the period ends....
Manufacturing Overhead is closed
When the actual overhead is incurred.....
Manufacturing Overhead is Debited
When Labor Costs are incurred, -- -- -- -- are added directly to the -- -- -- account.
Only Direct Labor Costs, Work In Process
The difference between overhead applied to work in process and actual overhead is......
Overapplied OR Underapplied Overhead
When calculating the cost of direct materials on the schedule of Costs of Goods Manufactured, the cost of Indirect materials is....
Subtracted from raw materials used in production
The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next. True or False?
True
Units of product that are only partially completed are put in which inventory?
Work In Process
Manufacturing costs consist of all manufacturing costs EXCEPT for Direct Materials AND Direct Labor. True or False?
True
A journal that debits manufacturing Overhead and credits accounts payable could be made to record.....
A(n) Factory utilities expense OR Rent expense on factory equipment
What side of the Manufacturing Overhead account is actual Manufacturing Overhead entered on?
ALWAYS the debit side
Raw Materials is an -- account
Asset
When preparing financial statements in a job order costing system, finished goods flow first to the -- -- and then to the -- --
Balance Sheet, Income Statement
A debit balance in manufacturing overhead means that the overhead was....
Underapplied
When only a portion of units involved in a job are sold the......
Unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold
If an Overapplied overhead is closed out in Cost of Goods Sold, the Cost of Goods Sold account will be,,,,,
Decreased
As items are removed from Raw Materials Inventory into the production process, they are called -- --
Direct Materials
How to calculate total manufacturing costs?
Direct Materials + Direct Labor + Applied Manufacturing Overhead
Period costs flow from finished goods to cost of goods sold. True or False
False
Completed units that have not yet been sold are put in which inventory?
Finished Goods
When a job is completed which account is debited?
Finished Goods
Net Operating Income Equation
Gross Margin - Administrative and Sales Expenses
Unadjusted Cost of goods sold equation:
(Costs of goods manufactured + Beginning Finished Goods Inventory) - Ending Finished Goods Inventory
Work In Process Consists of what 3 things?
1. Actual Direct Material Cost 2. Applied Manufacturing Overhead 3. Actual Direct Materials Cost
What 2 methods can be used to dispose of a(n) underapplied or overapplied overhead?
1. Allocating it among Work In Process, Finished Goods, and Cost Of Goods Sold 2. Closing it out to Cost Of Goods Sold
When the overhead is applied to Work In Process.......
Manufacturing overhead is Credited
Average Overhead costs may not be proportional to the actual amount of the allocation base used because......
Many actual overhead costs are fixed AND Overhead spending may not be under control
A credit balance in Manufacturing Overhead means that the overhead was......
Overapplied
Any purchased materials that will go into the finished product are first recorded in _______ ________ inventory account.
Raw Materials
How to find the amount of Raw Materials used in production?
Raw Materials available for use in production - Ending Raw Materials Inventory
Gross Margin Equation:
Sales - COGS
The Value of Work In Process is equal to.....
The Cost of all unfinished jobs
What is used to summarize costs that remain in the finished goods inventory and that have been transferred to cost of goods sold?
The Schedule Of Costs Of Goods Sold
Cost of goods manufactured includes......
The manufacturing of goods finished during the period
What is cost of goods manufactured?
The sum of all amounts transferred from Work in Process to Finished goods during a period
Which costs are charged directly to the Income Statement? Administrative Costs Manufacturing Overhead Direct Materials Selling costs Direct Labor
Administrative and Selling Costs
What appears on the job cost sheets and in the Work In Process account?
Applied Manufacturing Overhead
Actual Manufacturing Overhead Costs are recorded in the Manufacturing Overhead Account.....
As they are incurred
What account(s) are used to calculate Cost of Goods Available for sale on the schedule of cost of goods sold?
Beginning Finished Goods Inventory + Cost of Goods Manufactured
How to find the amount of Raw Materials available for use in production?
Beginning Raw Materials Inventory + Raw materials Purchased
The Simpler Method of closing out the balance of Manufacturing Overhead is......
Closing it out to Cost of Goods Sold
What two accounts are involved when underapplied or overapplied overhead is closed out using the simpler method?
Cost of Goods Sold AND Manufacturing Overhead
When the allocation method is used to close out the underapplied or overapplied balance remaining in Manufacturing overhead, which accounts are affected?
Cost of Goods Sold, Work In Process, AND Finished Goods
Actual Manufacturing Overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of Underapplied or Overapplied overhead would be:
Credit Manufacturing Overhead $5,000
The (Credit/Debit) side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the (Credit/Debit) is always used to record the actual manufacturing costs incurred
Credit, Debit
Journal entry to record goods sold on account
Debit: Accounts receivable & COGS Credit: Revenue, Inventory, and Sales tax Liability
Journal entry that records the incurrence of a selling cost
Debit: Advertising Expense Credit: Cash
Journal Entry that records goods that are sold
Debit: Cost of Goods Sold Credit: Finished Goods
Journal entry to record the depreciation of office equipment
Debit: Depreciation Expense Credit: Accumulated Depreciation
Journal Entry to record completion of a job
Debit: Finished Goods Credit: Work In Process
Journal entry to record the depreciation of factory equipment
Debit: Manufacturing Overhead Credit: Accumulated Depreciation
Journal entry to record expired prepaid factory Insurance
Debit: Manufacturing Overhead Credit: Prepaid Insurance
Journal Entry to record accrued property taxes on its manufacturing facility
Debit: Manufacturing Overhead Credit: Property Taxes Payable
Journal Entry to record Manufacturing overhead applied to job
Debit: Work In Process Credit: Manufacturing Overhead
The journal entry to record the purchase of direct and indirect materials into production.
Debit: Work In Process & Manufacturing Overhead Credit: Accounts Payable
The Journal entry to record direct and indirect labor costs.
Debit: Work In Process & Manufacturing Overhead Credit: Salaries and wages payable
The cost of jobs still unfinished by the end of the period are included in......
Ending Work In Process Inventory
Predetermined Overhead Rate Equation:
Estimated Manufacturing Overhead / Estimated Allocation Base
When costs are sold their costs are transferred out of.....
Finished Goods