ACT 220 Chapter 3

the journal entry to record the purchase of materials credits _________

accounts payable

the journal entry to record the purchase of materials credits the _________

accounts payable

the manufacturing overhead account is debited when ___________

actual overhead costs are incurred

the manufacturing overhead account is debited when ____________

actual overhead costs are incurred

to calculate the adjusted cost of goods sold ___________

add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold

a journal entry debiting salaries expense and crediting salaries and wages payable could record _________

administrative salaries

cost of good manufactured is the sum of:

all amounts transferred from work in process to finished goods during a period

raw materials

any materials that go into the final product

all manufacturing overhead costs are recorded in the Manufacturing Overhead account __________

as they are incurred

raw materials inventory is an __________

asset

how are direct labor costs expensed at the same time direct labor costs are added to _____________ they're also added to ________________

at the same time direct labor costs are added to work in process they are also added to the individual job cost sheet

when preparing financial statements in a job-order costing system, finished goods flow first to the ____________ and then to the ______________

balance sheet, income statement

the simpler method of closing out the balance of Manufacturing overhead is ___________

closing it out to Cost of goods sold

a journal entry that debits finished goods and credits work in process records the ______________

completion of a job

finished goods

consist of completed units of product that have not yet been sold to customers

amount transferred from Work in Process to Finished Goods is referred to as

cost of goods manufactured

what accounts are debited when goods are sold on account

cost of goods sold and accounts receivable

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

raw materials inventory represents the _________________________

cost of materials not yet used in production

the ______ side of the manufacturing overhead account is always used to record manufacturing overhead applied to the production and the __________ side is always used to record actual manufacturing costs incurred

credit debit

George Corporation recognized $1000 of accrued property taxes on it manufacturing facility the journal entry to record this debits __________

manufacturing overhead $1000 and credits property taxes payable $1000

if a company incurs $2000 of factory rent, $1000 of factory utilities, and $5000 of miscellaneous factory costs, the journal entry to record these transactions would be a debit to __________

manufacturing overhead $8000 and credit accounts payable $8000

manufacturing overhead cost is applied to work in process by

multiplying the predetermined overhead rate by the actual quantity of the allocation base consumed by each job

gross margin minus selling and administrative expenses equals __________

net operating income

when labor costs are incurred _____________ are added directly to the work in process account

only direct labor costs

underapplied or overapplied overhead is the difference between _____________________ and _________________

overhead applied to WIP and actual overhead

[learnsmart starts] any purchased materials that will go into the finished product are first recorded in the _________ ____________ inventory account

raw materials

the journal entry to record the purchase of materials debits _________

raw materials

when materials are purchased they are recorded in the ___________________________________ account

raw materials inventory

gross margin is calculated by subtracting _________ from _____________

sales - cost of goods sold

a journal entry that debits advertising expense and credits cash would record the incurrence of a ______

selling cost

a journal entry that debits advertising expense and credits cash would record the incurrence of a ________

selling cost

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

sold

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

cost of goods manufactured is the _________

sum of all jobs transferred from work in process to finished goods

cost of goods manufactured is the ___________

sum of all jobs transferred from work in process to finished goods

the value of work in process is equal to _________

the cost of all unfinished jobs

cost of goods manufactured includes

the manufacturing cost of goods finished during the period

cost of goods manufactured

the manufacturing costs associated with units of product that were finished during the period

how are manufacturing overhead costs assigned to Work in Process

they are assigned by using the predetermined overhead rate

how are nonmanufacturing costs expensed

treated as period expenses and charged directly to the income statement

(true/ false) the transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next

true

a debit balance in manufacturing overhead means overhead was __________________

underapplied

work-in-process

units of product that are only partially complete and will require further work before they are ready for sale to the customer

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

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

costs of partially completed units are accounted for in _____________

work in process

costs of partially completed units are accounted for in ______________

work in process

the journal entry to record the issuance of direct materials into production debits _________

work in process

to transform direct materials into completed jobs, direct labor cost is added to

work in process

units of product that are only partially complete are contained in the _____________________ inventory

work in process

when a job is completed, which account is credited

work in process

when a job is completed, which account is credited?

work in process

which account is debited to record direct labor costs

work in process

the journal entry to record $10000 in manufacturing overhead applied to job #40 debits

work in process $10000 and credits Manufacturing overhead $10000

when jobs are completed, their costs are transferred from ___________________to ________________

work in process to finished goods inventory

calculate the total manufacturing costs - direct materials: $40000 - direct labor: $120000 - beginning work in process inventory: $30000 - ending work in process inventory: $12000

$260000 $40000 +$100000 +$120000 = $260000

a company reports gross margin of $100000, cost of goods sold of $70000, and selling and admin expenses of $45000 net income (loss) is:

$55000 gross margin - selling & admin expenses 100000- 45000

raw materials inventory was $27000 at the beginning of the year and $25000 at the end of the year during the year $100000 in raw materials were purchased including $28000 of indirect materials that were put into manufacturing overhead during the period calculate the cost of direct materials used during the period

$74000

work in process consists of _____________

- actual direct labor cost - actual direct materials cost - applied manufacturing overhead

work in process consists of:

- actual direct labor cost - actual direct materials cost - applied manufacturing overhead

how to clear an account

- actual manufacturing overhead costs are debited to the account as they are incurred throughout the year - overhead is applied to Work in Process using the predetermined overhead rate

in a normal costing system, the manufacturing overhead account is debited for:

- actual overhead costs - the cost of indirect materials

what methods can be used to dispose of underapllied or overapplied manufacturing overhead?

- allocate it to Work in process, finished goods, and Cost of goods sold - close it to Cost of goods sold

in a normal costing system, Work in Process is debited for:

- direct materials - manufacturing overhead applied

a journal entry that debits manufacturing overhead and credits accounts payable could be made to record ___________

- factory utilities expense - rent expense on factory equipment

when jobs are sold, their costs are transferred from ____________ to ___________ and at this point the various costs are recorded as an ________ on the ___________

- finished goods - cost of goods sold - expense - income statement

actual overhead costs may not be proportional to the actual amount of the allocation base used because:

- many actual overhead costs are fixed - overhead spending may not be under control

raw materials inventory was $5000 at the beginning of the year and $12000 at the end of the year during the year, a total $27000 in raw materials were purchased including 4000 of indirect materials that were put into manufacturing overhead during the period

16000 beginning inventory + purchases - indirect materials - ending inventory 5000+ 27000 - 12000 - 4000 = 16000

cost of goods manufactured of $234000; beginning finished goods inventory of $18000 and ending finished goods inventory of $24000, calculate unadjusted cost of goods sold

228000 18000 + 234000 - 24000 = 228000

calculate cost of goods available for sale: - cost of goods manufactured of $234000 - beginning finished goods inventory of $18000 - ending finished goods inventory of $24000

252000 234000+18000

meep industries had unadjusted cost of goods sold of $300000. overhead was overapplied by $20000 adjusted cost of goods sold is ________________

280000

cost of goods manufactured of $410000; beginning finished goods inventory of $110000 and ending finished goods inventory of $125000, calculate unadjusted cost of goods sold

395000 110000 + 410000 - 125000 = 395000

Fillila Inc worked on three jobs this period: Job 14C, which cost $15000; job 23A which cost $28000, and Job 45B, which cost $23000. At the end of the period, only Job 14C was still in process (unfinished). The cost of goods manufactured this period is $___________

51000

the journal entry to record $1000 in expired prepaid insurance on factory equipment is debit:

manufacturing overhead $1000 and credit prepaid insurance $1000

actual manufacturing overhead is _________ to the Manufacturing overhead account

debited

difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that one _____________

debits depreciation expense, while the other debits manufacturing overhead

the journal entry to record depreciation on office equipment debits __________

depreciation expense and credits accumulated depreciation

a journal entry that debits Manufacturing overhead and credits Accumulated depreciation records __________

depreciation on factory equipment

a journal entry that debits manufacturing overhead and credits accounts payable would not be used to record

direct labor costs

a journal entry that includes Manufacturing overhead and Cost of goods sold is recorded to _______________

dispose of underapplied or overapplied overhead

unadjusted cost of goods sold is calculated by subtracting ____________ from ___________

ending finished goods inventory from goods available for sale

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

the cost of jobs still unfinished at the end of a period are included in ____________

ending work in process inventory

how are manufacturing overhead costs expensed

entered directly into the Manufacturing Overhead account as they are incurred

period costs are recorded as

expenses on the income statement in the period incurred

(true/false) actual overhead costs appear in the Work in Process account but not the job cost sheet

false

(true/false) period costs flow from finished goods to cost of goods sold

false

completed units that have not yet been sold are found in _______________ inventory

finished goods

when a job is completed, its costs are transferred into__________

finished goods

when a job is completed, which account is debited

finished goods

Himber, Inc. just completed a job that cost $14000 in direct materials, $12000 in direct labor, and $8000 in applied manufacturing overhead. The journal entry to record completion of the job debits ________

finished goods $34000 and credits work in process $34000

when goods are sold on account, what accounts are credited

finished goods and sales

a journal entry debiting cost of goods sold and crediting finished goods is made when __________

goods are sold

net operating income is calculated by subtracting _______ from _______

gross margin - selling and admin expenses

labor costs charged to manufacturing overhead represent

indirect labor costs

labor costs charged to manufacturing overhead represent ____________

indirect labor costs

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

manufactured

manufacturing overhead consists of all_______

manufacturing costs other than direct labor and direct materials