Acct2020 Ch 3

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

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 ______.

$55,000

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.

$74,000

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

1. Allocate it to Work in process, Finished goods, and Cost of goods sold. 2. Close it to Cost of goods sold.

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

1. Finished 2. Goods

Which of the following would not be charged to the Manufacturing overhead account?

Nonmanufacturing costs

Manufacturing overhead is applied with a debit to ______.

Work in process

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit ______.

Work in process $40,000, debit Manufacturing overhead $30,000 and credit Raw materials $70,000

Completed units that have not yet been sold are found in

accounts payable

The journal entry to record the purchase of materials credits ______.

accounts payable

Overhead is overapplied if ______.

actual overhead is less than applied overhead

The more accurate method of closing out the balance in Manufacturing overhead is ______.

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

The journal entry to record selling and administrative salaries debits ______.

an expense account and credits Cash or a liability

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

application of manufacturing overhead costs

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______.

as they are incurred

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______.

direct labor costs

Selling and administrative costs first appear on the ______.

income statement

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

manufactured

Manufacturing overhead consists of all ______.

manufacturing costs other than direct labor and direct materials

Gross margin minus selling and administrative expenses equals ______.

net operating income

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.

purchase of materials

The journal entry to record the purchase of materials debits ______.

raw materials

The schedule of cost of goods BLANK summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold.

sold

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to debit ______.

Manufacturing overhead $8,000 and credit Accounts payable $8,000

The journal entry to record issuing materials to be used in production credits ______.

Raw materials

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ______.

Work in process $10,000 and credits Manufacturing overhead $10,000

The journal entry to record issuing both direct and indirect materials into production debits ______.

Work in process and Manufacturing overhead

Overhead is underapplied if ______.

actual overhead is more than applied overhead

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______.

administrative salaries

The simpler method of closing out the balance of Manufacturing overhead is ______.

closing it out to Cost of goods sold

Finished goods ______.

consists of completed, unsold goods

Unadjusted cost of goods sold is calculated by subtracting ______.

ending finished goods inventory from goods available for sale

Labor costs charged to Manufacturing Overhead represent ______.

indirect labor costs

The schedule of cost of goods BLANK summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory. (Enter only one word per blank.)

manufactured

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

only direct labor costs

A credit balance in the Manufacturing Overhead account means overhead was BLANK

overapplied

Selling and administrative costs incurred are treated as ______.

period expenses

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

Which of the following statements are true?

1. Raw materials inventory represents the cost of materials not yet used in production. 2. When materials are purchased they are recorded in the Raw materials inventory account.

Units of product that are only partially complete are contained in the BLANK BLANK BANK inventory

1. Work 2. In 3. Progress

Work in Process consists of ______.

1. applied manufacturing overhead 2. actual direct labor cost 3. actual direct materials cost

Manufacturing overhead costs include ______.

1. factory insurance the factory 2. supervisor's salary

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.

1. factory utilities expense 2. rent expense on factory equipment

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

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

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to ______.

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

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

Finished Goods

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

Cost of goods manufactured is the ______.

sum of all jobs transferred from Work in process to Finished goods

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

When a job is completed, the job costs are transferred OUT OF ______.

work in progress

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

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

1. Raw 2. Materials

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

Applied manufacturing overhead is entered on what side of the Manufacturing overhead account?

Always the credit side

What side of the Manufacturing overhead account is actual manufacturing overhead entered on?

Always the debit side