chapter 15-16 ACC 121

You would record the labor costs to an individual job by using the:

time tickets

At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be

transferred to Cost of Goods Sold

True or False: Financial Accounting Reports must be prepared in accordance to GAAP.​

true

All of the following employees hold line positions for a computer company except:​ vice president of production​ vice president of finance​ manager of the web design​ vice president of sales

vice president of finance

Each document in the cost ledger is called a​

job cost sheet​

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as​

Factory Overhead​

The recording of the jobs completed would include a debit to

Finished Goods

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had total production costs of $375,000. The entry to record the transfer of costs from work in process to finished goods is

Finished Goods 540,000​ Work In Process 540,000

Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?​

Managers

How are inventories listed?

Materials Work in Process Finished Goods

The journal entry to record the purchase of $45,000 of raw materials is​

Materials Debit, Accounts Payable Credit​

What cost show only on the income statement?

Period Costs

Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process are referred to as​

Period Costs​

What cost show only on the income statement?​

Period Costs​

During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. In addition, factory overhead charged to production was $32,000. The entry to record the direct labor costs is​

Work In Process 150,000​ Wages Payable 150,000

Which costs are product costs? ​ direct materials​ sales and administrative expenses​ direct labor​ factory overhead

a) direct materials​ c) direct labor​ d)factory overhead

The entry to record the flow of direct labor costs into production in a job order cost accounting system is

debit Work in Process, credit Wages Payable

True or False: Managerial Accounting Reports must be prepared in accordance to GAAP.​

false

The document authorizing the issuance of materials from the storeroom is a

materials requisition

The source document for the data for debiting Work in Process for direct materials is a

materials requisition

In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a

receiving report

Aspen technologies has the following budget data:​ Estimated direct labor hours 15,000​ Estimated direct labor dollars $90,000​ Estimated Factory Ovehead costs $300,000​ If the factory overhead is based on direct labor hours, the predetermined factory overhead rate is:

$300,000/15,000 = $20 per direct labor hour

Which 2 product costs are prime costs: ​ 1.Direct materials​ 2. Direct labor​ 3. Factory Overhead

1. Direct Materials and 2 Direct Labor

Cost of materials used $45,000​ Direct labor costs 48,000​ Factory overhead 39,000​ Work in process, beg. 28,000​ Work in process, end. 18,000​ Finished goods, beg. 28,000​ Finished goods, end. 18,000​ What is the cost of goods sold?

152,000

Which 2 product costs are conversion costs: ​ 1.Direct materials​ 2. Direct labor​ 3. Factory Overhead

2 Direct labor and 3 Factory Overhead

The Darwin Company reports the following information:​ ​ Sales $76,500​ Direct materials used 7,300​ Depreciation on factory equipment 4,700​ Indirect labor 5,900​ Direct labor 10,500​ Factory rent 4,200​ Factory utilities 1,200​ Sales salaries expense 15,600​ Office salaries expense 8,900​ Indirect materials 1,200​ Determine the product cost:

35,000

Given the following data:​ Beginning raw materials inventory $60,000​ Materials purchased 65,000​ Ending raw materials inventory 40,000​ What is the amount of raw materials used?

85,000

The following information is taken from the financial records of Gunner Manufacturing:​ Cost of materials used $65,000​ Direct labor costs 48,000​ Factory overhead 39,000​ Work in process, beg. 18,000​ Work in process, end. 28,000​ What is cost of goods manufactured?

=Cost of goods manufactured---142,000 ​

Formula for COGS

Beginning Finished Goods+ COGM= goods available for sale - ending finished goods = COGS

How to calculate Cost of Materials Used

Beginning materials + purchased= materials available for use - ending materials = COMU

What term refers to the cost of changing direct materials into a finished manufactured product?

Conversion (Cost)

Compute conversion costs given the following data: Direct Materials, $347,500; Direct Labor, $196,300; Factory Overhead, $187,900; and Selling Expenses, $45,290.

Conversion Cost $384,200

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is

Cost of Goods Sold 375,000​ Finished Goods 375,000

How to calculate product costs:

DM+DL+FO

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as

Direct Labor

Sales $76,500​ Direct materials used 7,300​ Depreciation on factory equipment 4,700​ Indirect labor 5,900​ Direct labor 10,500​ Factory rent 4,200​ Factory utilities 1,200​ Sales salaries expense 15,600​ Office salaries expense 8,900​ Indirect materials 1,200​ Compute the conversion cost for Darwin Company:

Direct labor 10,500​ Depreciation on factory equipment 4,700​ Indirect labor 5,900​ Factory rent 4,200​ Factory utilities 1,200​ Indirect materials 1,200​ Total conversion cost----------------------------- 27,700

If the cost of a direct material is a small portion of total production cost, it may be classified as part of direct materials, direct labor or factory overhead?

Factory Overhead

Indirect labor and indirect materials are classified as

Factory Overhead

In a job order cost accounting system, the entry to record the flow of indirect materials into production is

Factory Overhead debit, Materials credit

Which of the following is an example of a factory overhead cost?​ repair and maintenance cost on the administrative building​ factory heating and lighting cost​ insurance premiums on salespersons' automobiles​ president's salary

b) Factory Heating and lighting cost

Insurance expense incurred on a factory building would be treated as a​ direct cost​ period cost​ product cost​ selling cost

c) Product cost

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?​

controlling

The details concerning the costs incurred on each job order are accumulated in a work in process account and supported by a

cost ledger

If the amount of factory overhead cost incurred is less than the amount applied, the factory overhead account will have a

credit balance and be overapplied

Which of the following is an example of direct materials cost for an automobile manufacturer​ ​ cost of oil lubricants for factory machinery​ cost of wages of assembly worker​ salary of production supervisor​ cost of interior upholstery

d) cost of interior upholstery

In a job order cost accounting system, the entry to record the flow of direct materials into production is

debit Work in Process, and credit Materials

The Thomlin Company forecasts that total overhead for the current year will be $15,750,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is

Predetetmined Factory Overhead Rate = 15,750,000/250,000 hours = $63 per machine hour

Costs that are treated as assets until the product is sold are​

Product Costs

What costs show on the balance sheet and the income statement?

Product Costs

How to complete a cost of goods manufactured schedule:

See Review Problem 4: BWIP DM + DL + FO= TMI TMI + BWIP = TMC TMC - EWIP= COGM

Balance Sheet for a Manufacturing Business

See problem 2

What is the form for an Income statement of a manufacturing business?

See problem 4: Sales COGS: BFGI + COGM= COFG available for sale COFG- EFGI= COGS Sales- COGS= GP After Gross Profit, list operating expenses, administrative (office only) and selling selling expenses. GP - OE= NI/NL

How to calculate period costs

Selling expenses+ administrative expenses

Materials must have which two qualities in order to be classified as direct materials​

They must be an integral part of the finished product and be a significant portion of the total product cost

The amount of time spent by an employee on an individual job are recorded on

Time Ticket

At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. What would describes the nature of this balance and how it would be reported on the interim balance sheet?

Underapplied, deferred debit