ACC 202 CH 3 MSU
Corp. sold goods costing 50K for 75K. Journal entries to be made could include debiting
COGS for 50K AR for 75K
Which account is credited when manufacturing overhead is applied?
Manufacturing overhead
The incurrence of direct labor costs should be recorded by debiting
Work in process account
Overhead is underapplied if
actual overhead is more than applied overhead
Actual manufacturing overhead costs are recorded in the Manufacturing overhead account
as they are incurred
raw materials is a
asset account
Corp. recognized 1k of accrued property taxes on its manufacturing facility. The journal entry should read
debit 1k to manufacturing overhead and credit property taxes 1k
Underapplied overhead results in a
debit balance
Journal entry to record expired prepaid insurance on factory equipment is
debit manufacturing overhead and credit prepaid insurance
If overapplied overhead is close out to COGS, the COGS account will be
decreased
A journal entry that debits manufacturing overhead and credits accumulated depreciation records
depreciation on the factory equipment
to calculate total manufacturing costs, add
direct materials, direct labor and applied manufacturing overhead
Period costs are recorded as expenses as incurred and
do not flow through the inventory accounts
Cost of jobs still unfinished at the end of of a period are included in
ending Work in Process inventory
Predetermined over rate formula
estimated manufacturing overhead cost divided by estimated allocation base
Manufacturing overhead costs include
factory insurance supervisors salary
Sales minus cost of goods sold equals
gross margin
Selling and administrative costs first appear on the
income statement
Labor costs charges to manufacturing overhead represent
indirect labor costs
When overhead is applied to Work in Process
manufacturing overhead is credited
When actual overhead is incurred
manufacturing overhead is debited
Applied manufacturing overhead will most likely ____actual manufacturing overhead
not equal
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
When labor costs are incurred, ______are added directly to the Work in Process account
only direct labor costs
A credit balance in the manufacturing overhead account means overhead was
overapplied
the difference between overhead applied to work in process and actual overhead is
overapplied or underapplied overhead
Actual overhead costs may not be proportional to the actual amount of the allocation base used because
overhead spending may not be under control many actual overhead costs are fixed
The journal entry to record issuing materials to be used in production credits
raw materials
Net operating income is calculated by subtracting
selling and administrative expenses from gross margin
A journal entry that debits advertising expense and credits cash would record the incurrence of a
selling cost
When calculating the cost of direct materials on the schedule of costs of goods manufactured, the cost of indirect materials is,
subtracted from raw materials used in production
The value of work in process is equal to
the cost of all unfinished jobs
Underapplied or overapplied overhead is
the difference between overhead applied to work in process and actual overhead
Work in Process consists of
Actual direct materials cost Actual direct labor cost applied manufacturing overhead
Which costs are charged directly to the income statement?
Administrative costs Selling costs
What methods can be used to dispose of underapplied or overapplied manufacturing overhead?
Allocate it to Work in Process, Finished Goods and COGS Close it to COGS
Which of the following appears on a job cost sheets and in the work in process account?
Applied manufacturing overhead
The journal entry to record the purchase of materials debits
Raw materials
Which account is debited to record direct labor costs?
Salaries and wages payable
Which of the following are charged directly to the income statement?
Selling costs Administrative costs
The_____side is always used to record the actual manufacturing costs incurred
debit
Which of the following are used to calculate the Cost of Goods Available For Sale on the schedule of COGS?
Beginning finished goods inventory costs of goods manufactured
Cost of direct materials
Beginning inventory+purchases-indirect materials-ending inventory
Which of the following are used to calculate Cost of Goods Available For Sale on the schedule of COGS?
Cost of goods manufactured beginning finished goods inventory
When a job is completed, its costs are transferred into
Finished Goods
The journal entry to record the more accurate allocation of overapplied or underapplied overhead entries to
Finished goods Work in Process COGS Manufacturing overhead
When the period ends
Manufacturing overhead is closed
Units of product that are only partially complete are contained in the
Work in Process inventory
the cost of goods _____is the sum of all amounts transferred for Work in process to Finished goods during a period
completed
Finished goods consists of
completed unsold goods
The_____side of the manufacturing overhead account is always used to record manufacturing overhead applied to production
credit
When overhead is underapplied, a _____must be made to the Manufacturing overhead account to close it out
credit