CH. 3 (ACC 252 Exam 1)

cost of goods manufactured (journal entry)

(job B's costs will remain in work in process and carry over to the next month)

disposing of over/under applied overhead: 2 ways

1. closed to cost of goods sold 2. closed proportionally to work in process, finished goods, and COGS (more accurate but more complex)

overapplied overhead

A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process exceeds the amount of overhead cost actually incurred during a period.

underapplied overhead

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.

schedule of cost of goods sold

A schedule that also contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and that summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.

schedule of cost of goods manufactured

A schedule that contains three elements of product costs: direct materials, direct labor, and manufacturing overhead. And it summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.

cost of goods available for sale (computation)

beginning finished goods inventory + cost of goods manufactured

where does the cost of sold goods get transferred to when they are sold?

from finished goods to cost of goods sold (and their costs are recorded as an expense on the income statment)

manufacturing overhead applied to work in process (computation)

predetermined overhead rate x actual amount of the allocation base recorded on all jobs

underapplied and overapplied overhead

the difference between the overhead cost applied to work in process and the actual overhead costs of a period

cost of goods manufactured

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