Managerial Accounting Week 2 Notes

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account

As they are incurred

When a job is completed, which account is debited?

Finished goods

When goods are sold on account, what accounts are credited?

Finished goods and Sales

The journal entry to record expired prepaid factory insurance debits

Manufacturing Overhead and credits Prepaid Insurance

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 found on the balance sheet?

Raw Materials Manufacturing Overhead Direct Labor

Units of product that are only partially completed are put in which inventory?

Work In Process

The Manufacturing Overhead account is debited when

actual overhead costs are incurred

The Manufacturing Overhead account is debited when ______.

actual overhead costs are incurred

Overhead is underapplied if ______.

actual overhead is more than applied overhead

A journal entry that debits Work in process and credits Manufacturing overhead is recording the

application of manufacturing overhead costs

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

completion of job

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

cost of goods manufacturing

Raw materials inventory represents the ________ not yet used in production.

cost of materials

The 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 that debits Work in Process and Manufacturing overhead and credits Salaries and Wages Payable is recording``

direct and indirect labor costs

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record

direct labor costs

A journal entry that debits Manufacturing overhead and credits Prepaid insurance records the

expiration of prepaid factory insurance

A journal entry that debits Manufacturing overhead and credits Prepaid insurance records the:

expiration of prepaid factory insurance

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

factory utilities expense rent expense on factory equipment

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

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

goods are sold

Selling and administrative costs first appear on the

income statement

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______.

issuance of materials

Gross margin minus selling and administrative expenses equals ______.

net operating income

Gross margin minus selling and administrative expenses equals ______. Multiple choice question. cost of goods sold

net operating income

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

nonmanufacturing

Applied manufacturing overhead will most likely ______ actual manufacturing overhead.

not equal

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

purchase of materials

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

recognition of accrued property taxes

Net operating income is calculated by subtracting

selling and administrative expenses; gross margin

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

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

work in process

Costs of partially completed units are accounted for in ______.

work in process

Units of product that are only partially complete are contained in the _________ inventory

work in process

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

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

applied manufacturing overhead

Sales minus cost of goods sold equals ______

gross margin

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

only direct labor costs

A journal entry that involves Manufacturing overhead, Work in process, Finished goods, and Cost of goods sold is recorded to ______.

dispose of underapplied or overapplied overhead

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

selling cost

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

Depreciation expense and credits accumlated depreciation.

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.

produced

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

work in process

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

Manufacturing overhead and credits Accumulated depreciation

Manufacturing overhead costs include ______..

- the factory supervisor's salary - factory insurance

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 the purchase of materials credits ______.

accounts payable

Finished goods ______.

consists of completed, unsold goods

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

manufactured