A202 Chapter 3

Marketing costs (are/are not) a part of manufacturing overhead.

Are Not; they are a nonmanufacturing cost

Which accounts when using the allocation method are closed when overapplied or underapplied balance in Manufacturing Overhead at the end of the period?

Cost of Goods Sold, Finished Product, Work in Progress

Debit to Work in Progress and Manufacturing and Credit to Salaries and Wages Payable

Direct and Indirect Labor Costs

A predetermined overhead rate is calculated by dividing the ____ total manufacturing overhead by the ____ total amount of the allocation base.

Estimated; estimated

(T/F) Direct Labor costs flow through the Raw Materials Inventory account.

F

(T/F) Raw Materials include only the cost of direct materials.

F; they include both direct and indirect materials

What kinds of costs are assigned to units of product in absorption costing?

Fixed and Variable Manufacturing Costs

The document that records the materials, labor, and manufacturing overhead costs charged to a job is the:

Job Cost Sheet

Typical cost drivers include:

Machine Hours, Flight Hours, Computer Time

Manufacturing Overhead includes:

Maintenance wages, factory rent, factory utilities

What account is debited for the issuance of indirect materials?

Manufacturing Overhead

What is the formula for applying overhead to a specific job?

Predetermined Overhead Rate x Amount of Allocation Base Incurred by Job

Which costs are charged directly to the income statement?

Selling and Administrative Expenses

Manufacturing Overhead costs are (steady/not steady) from one period to the next.

Steady due to fixed costs

(T/F) Raw materials used in production are transferred to Work in Progress.

T

(T/F) When materials are purchased they are recorded in the Raw Materials Inventory account.

T

A(n) ____ ____ is a document to record how long workers spend on each job and task.

Time Ticket

What are widely used allocation bases in manufacturing?

Units of Production, Direct Labor Cost, Direct Labor Hours, Machine Hours

Which accounts are debited in the journal entry to record manufacturing labor costs?

Work in Process and Manufacturing Overhead

A cost driver is

a factor that causes overhead costs to occur

The United States requires ____ costing for tax reports.

absorption

A measure of activity used to assign overhead costs to products and services and sometimes a cost driver is a(n)

allocation base

Underapplied or Overapplied Manufacturing Costs can be disposed of by:

closing it out to COGS or allocating it to COGS, WIP, and Finished Goods

Manufacturing Overhead costs consist of many different items and include all costs other than (direct/indirect) costs.

direct