Managerial Accounting Chapter 3
examples of non-manufacturing costs:
-Salary expense of employeeswho work in a marketing, selling,or administrative capacity are expensed in the period incurred. -Advertising expenses are expensedin the period incurred.
what does the schedules calculate?
-the cost of raw material and direct labor used in production and the amount of manufacturing overhead applied to production. -the manufacturing costs associated with goods that were finished during the period
unadjusted cost of goods sold = ___ + ____ - ____
beginning finished goods inventory + cost of goods manufactured - ending finished god inventory
raw materials used in production = _________ + ______ - _______
beginning raw materials inventory + purchases of raw materials - ending raw materials inventory
the schedule of ____ ___ ____ ___ contains three elements of product costs ( ___ ____, ____ ___, ____ ___) and it summarizes the portions of those costs that remain in finished goods inventory and those that are transferred out of finished goods and into cost of goods sold
cost o goods sold (direct materials, direct labor, manufacturing overhead)
the ___ of ___ ____ includes the manufacturing costs associated with the units of a product that were finished during the period
cost of goods manufactured
the schedule of ____ ___ ____ ___ contains three elements of product costs ( ___ ____, ____ ___, ____ ___) and it summarizes the portions of those costs that remain in work in process inventory and those that are transferred out of work in process and into finished goods
cost of goods manufactured (direct materials, direct labor, manufacturing overhead)
once the goods are completed, the costs of products goes to ____ of _____ _____
costs of goods sold
manufacturing overhead is _____ when overhead is applied to work in process
credited
labor contains both ____ and ____ labor. _____ labor goes straight to work in process while ___ labor goes into manufacturing overhead
indirect, direct, direct, indirect
raw materials contains both ____ and ____ materials. _____ materials goes straight to work in process while ___ materials goes out of raw materials and into manufacturing overhead
indirect, direct, direct, indirect
salaries and wages payable contain both ____ and ____ costs. _____ costs goes straight to work in process while ___ costs goes into manufacturing overhead
indirect, direct, direct, indirect
what does the costs of goods manufactured calculate?
it calculates the manufacturing costs associated with goods that were finished during the period.
non-manufacturing costs should not go into ____ _____ beacuse they are __ costs
manufacturing overhead, period
____ _____ include any materials that go into the final product
raw materials
when we sell goods, we generate ____
revenue
if raw materials are assumed direct materials, what can we assume?
that we do not have to deduct indirect materials on the schedule of cost of goods manufactured
manufacturing overhead is closed when :
the period ends
how do you find applied manufacturing overhead?
the predetermined rate * the actual hours
product costs only get expensed when:
we sell the good
___ in ____ consists of units of a product hat are partially complete ad will require work before they are ready for sale
work in process
overhead is applied to ___ in ____ using the predetermined rate
work in process
when raw materials are used in production as direct materials, their cots are then transferred to ____ in ____
work in process
cost of goods manufactured gets pulled out of ___ in ___ and put into ___ ___
work in process, finished goods
for applied manufacturing overhead, what is the journal entry?
debit work in process, credit manufacturing overhead
manufacturing overhead is ____ when actual overhead is _____
debited, credited
increased COGS ____ gross margin
decreases
over applied MOH _____ COGS
decreases
total manufacturing costs = ____ + ____ + _____
direct materials + direct labor + manufacturing overhead applied to work in process
3 main product costs
direct materials, direct labor, manufacturing overhead
Nonmanufacturing costs are not assigned to individual jobs, rather they are:
expensed in the period incurred.
since product costs have not been sold, there are NO _____
expenses
_____ ____ consists of completed units of product that have not yet been sold to customers
finished goods
when goods are finished, we take it out of _____ ___ and then we ____ them
finished goods, sell
undersupplied MOH ___ COGS
increases
decreased COGS ____ gross margin
increases
manufacturing overhead costs are _____ costs
indirect
the difference between the overhead cost applied to work in process and the actual overhead costs of the period is called either ____ overhead or _____ overhead
over-applied or under-applied overhead
cost of goods manufactured = ____ + ____ - ____
total manufacturing costs + beginning work in process inventory - ending work in process inventory
if actual and applied manufacturing overhead are not equal, a ____ ____ is required
year adjustment
how do you balance the manufacturing overhead account?
you either debit or credit the over/under applied manufacturing overhead, depending on if it is uder/overapplied, then you credit/debit COGS
once you have the actual manufacturing overhead and the applied manufacturing overhead, then what?
you have to determine he amount of overhead over/under applied
once you record the entry for applied manufacturing overhead, what do you have to do next?
you have to record the actual manufacturing overhead on the t-account and balance the account
how do you find the predetermined overhead rate
you would use the estimated manufacturing overhead number divided by the estimated activity (direct labor hours for example)