Accounting 2 Module 3

Job #4260 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

$120,000

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.

$228,000

Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

410 + 110 - 125 = $395,000

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, 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.

Beginning RM + Purchased RM - Ending RM - Indirect Materials $74,000

Cost of Goods Manufactured

Costs that remain in Work in process inventory and that have been transferred

Underapplied or overapplied overhead is the

Difference between overhead applied to work in process and actual overhead

When labor costs are incurred, _________ labor costs are added directly to the Work in Process account.

Direct

Labor costs charged to Manufacturing Overhead represent ______ labor costs

Indirect

Labor costs charged to Manufacturing Overhead represent ________ labor costs.

Indirect

what is credited when manufacturing overhead is applied?

Manufacturing Overhead

What is credited when manufacturing overhead is applied?

Manufacturing overhead

A credit balance in Manufacturing overhead means overhead is

Over applied

The journal entry to record the purchase of materials debits is

Raw Materials

A journal entry that debits Work in process and credits Manufacturing overhead is recording the

application of manufacturing overhead cost

Net Operating income

income before interest and taxes Gross Margin - Sales and Administrative expenses

The difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

Which of the following costs are charged directly to the income statement? selling costs direct labor manufacturing overhead administrative costs direct materials

selling costs administrative costs

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is _____.

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

subtracted from raw materials used in production Indirect materials are not directly traceable to the product and are therefore included in manufacturing overhead, not in the cost of direct materials. Thus, they are subtracted when calculating the cost of direct materials used.

Manufacturing overhead costs include which 2 direct materials the CEO's salary office equipment depreciation the factory supervisor's salary factory insurance

the factory supervisor's salary factory insurance

When only a portion of the 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

Any purchased materials that will go into the finished product are first recorded in the

Raw Materials Investory account

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

Manufacturing overhead is applied with a debit to

Work in Process