chapter 3 smartbook

Carlisle, Inc. had Sales of $500,000, Cost of goods sold of $400,000, and Selling and administrative expenses of $50,000. Gross margin is ______.

$100,000

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

Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Beginning work in process inventory was $27,000; and Ending work in process inventory was $25,000. Calculate the cost of goods manufactured.

$208,000

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

Estimated manufacturing overhead $500,000 Estimated direct labor hours 200,000 Actual manufacturing overhead $625,000 Actual direct labor hours 260,000 The company applies overhead using direct labor hours as the cost driver. Calculate the amount that overhead was overapplied or underapplied.

$25,000 overapplied

Meep Industries had unadjusted cost of goods sold of $300,000. Overhead was overapplied by $20,000. Adjusted cost of goods sold is ______.

$280,000

Martin Industries had unadjusted cost of goods sold of $450,000. Overhead was underapplied by $30,000. Adjusted cost of goods sold is ______.

$480,000

Given the following, calculate the cost of goods available for sale. Cost of goods manufactured of $410,000 Beginning Finished goods inventory of $110,000 Ending Finished goods inventory of $125,000

$520,000

Luver Corporation's Gross margin is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Net operating income is ______.

$55,000

Which of the following statements are true?

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

Work in Process consists of ______.

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

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

Given the following, calculate total manufacturing costs: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000

186,000

Given the following, calculate the cost of goods available for sale. Cost of goods manufactured of $234,000 Beginning Finished goods inventory of $18,000 Ending Finished goods inventory of $24,000

252,000

Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?

65,000

Milton Corporation sold goods costing $50,000 for $75,000. Journal entries to be made could include entries debiting ______.

Cost of Goods Sold for $50,000 and Accounts Receivable for $75,000

The journal entry to record depreciation on office equipment debits ______.

Depreciation expense and credits Accumulated depreciation

True or false: Actual overhead costs appear in the Work in Process account but not on the job cost sheet.

False

True or false: Job B was not completed by April 30. If an April balance sheet is prepared, the costs accumulated for Job B will NOT appear on it.

False

True or false: Period costs flow from Finished Goods to Cost of Goods Sold.

False

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

Finished Goods

When jobs are sold their costs are transferred out of ______.

Finished Goods

The journal entry to record a completed job debits ______.

Finished goods

The journal entry to record the more accurate allocation of overapplied or underapplied overhead includes entries to ______.

Finished goods Work in process Cost of goods sold Manufacturing overhead

Himber, Inc. just completed a job that cost $14,000 in direct materials, $12,000 in direct labor, and $8,000 in applied manufacturing overhead. The journal entry to record completion of the job debits ______

Finished goods $34,000 and credits Work in process $34,000

The accounts credited when goods are sold on account are ______.

Finished goods and Sales

The journal entry to record $20,000 in depreciation on factory equipment is debit ______.

Manufacturing Overhead $20,000 and credit Accumulated Depreciation $20,000

The journal entry to record expired prepaid insurance on factory equipment is debit ______.

Manufacturing Overhead and credit Prepaid Insurance

The journal entry to record expired prepaid factory insurance debits ______.

Manufacturing Overhead and credits Prepaid Insurance

Match each event in the process of accounting for manufacturing overhead with the appropriate entry.

Manufacturing overhead is debited Manufacturing overhead is credited Manufacturing overhead is closed

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

Nonmanufacturing costs

Which of the following costs are found on the balance sheet of a manufacturer?

Raw Materials Direct Labor Manufacturing Overhead

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

Raw materials

The journal entry to record labor costs credits ______.

Salaries and wages payable

True or false: Underapplied or overapplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels.

True

Underapplied or overapplied overhead is the ______.

Underapplied or overapplied overhead is the ______.

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

The journal entry to record manufacturing labor costs debits ______.

Work in process and Manufacturing overhead

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

accounts payable

The Manufacturing Overhead account is debited when ______.

actual overhead costs are incurred

Overhead is overapplied if ______.

actual overhead is less than applied overhead

Overhead is underapplied if ______.

actual overhead is more than applied overhead

Overapplied or underapplied overhead is the difference between ______.

actual total overhead and total overhead applied

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

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

Job cost sheets and the work in process account contain ______ manufacturing overhead.

applied

To calculate total manufacturing costs, add direct materials, direct labor and ______.

applied manufacturing overhead

Raw Materials is a(n) _______ account.

asset

Raw materials inventory is an ______.

asset

When preparing financial statements in a job-order costing system, finished goods flow first to the ______ and then to the _________.

balance sheet; income statement

A journal entry that debits Finished goods and credits Work in process records the ______.

completion of a job

Finished goods ______.

consists of completed, unsold goods

The amount transferred from Work in Process to Finished Goods is ______.

cost of goods manufactured

Manufacturing overhead applied to production is always recorded on the _________ side of the manufacturing overhead account and the ________ side is always used to record the actual manufacturing costs incurred.

credit; debit

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

debited

If overapplied overhead is closed out to Cost of goods sold, the Cost of goods sold account will be ______.

decreased

A journal entry that debits Depreciation expense and credits Accumulated depreciation records ______.

depreciation on office equipment

The cost of jobs still unfinished at the end of a period are included in ______.

ending Work in process inventory

Unadjusted cost of goods sold is calculated by subtracting ______.

ending finished goods inventory from goods available for sale

Manufacturing overhead costs include ______.

factory utilities factory rent factory maintenance wages factory insurance the factory supervisor's salary

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

factory utilities expense rent expense on factory equipment

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

finished goods

A journal entry debiting Cost of goods sold and crediting Finished goods is made when ______.

goods are sold

Sales minus cost of goods sold equals ______.

gross margin

Cost of goods manufactured ______.

includes the manufacturing costs of goods finished during the period

Labor costs charged to Manufacturing Overhead represent ______ labor costs.

indirect

The journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ______ and credits cash.

insurance expense

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

manufactured

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

Which of the following is a clearing account?

manufacturing overhead

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

Gross margin minus selling and administrative expenses equals ______.

net operating income

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

only direct

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

overapplied or underapplied overhead

Selling and administrative costs incurred are treated as ______.

period expenses

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

purchase of materials

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

raw materials

A journal entry that debits Manufacturing overhead and credits Property taxes payable records the ______.

recognition of accrued property taxes

A journal entry that debits Advertising expense and credits Cash would record the incurrence of a ______.

selling cost

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

A debit balance in Manufacturing overhead means overhead was ____.

underapplied

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

Costs of partially completed units are accounted for in ______.

work in process

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

work in process

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

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

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

Always the credit side

George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.

Manufacturing overhead $1,000 and credits Property taxes payable $1,000

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

Which of the following costs are charged directly to the income statement?

Administrative costs Selling costs

The journal entry to record depreciation on factory equipment debits ______.

Manufacturing overhead and credits Accumulated depreciation

All the costs appearing on the job cost sheets of the jobs that are being worked on are found in the ______ account.

Work in Process

Manufacturing overhead is applied with a debit to ______.

Work in process

Gross margin is calculated by subtracting ______ from ______.

cost of goods sold; sales

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

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