accounting 2: ch 3

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 5,000 + 27,000 - 12,000 - 4,000

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 18,000 + 234,000 - 24,000

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 ______.

120,000 200,000/1,000 = $20 $20 x 600 = $120,000

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

Always the debit side

Which of the statements regarding closing out over or underapplied overhead is correct?

Closing to Cost of goods sold is simpler, and allocating is more accurate

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to

Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold

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

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

Overhead is overapplied if

actual overhead is less than applied overhead

Overhead is underapplied if

actual overhead is more than applied overhead

A journal entry debiting Salaries expense and crediting Salaries and wages payable could be recording

administrative salaries

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record _________. a. rent on factory equipment b. factory utilities costs c. direct labor costs d. miscellaneous factory overhead costs

c. direct labor costs

Cost of goods manufactured is the ______. a. value of all jobs transferred from Finished goods to Cost of goods sold b. sum of all jobs in Finished goods at the end of a period c. sum of all jobs transferred from Work in process to Finished goods d. average value of the Work in process account

c. sum of all jobs transferred from Work in process to Finished goods

The simpler method of closing out the balance of Manufacturing overhead is

closing it out to Cost of goods sold

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

cost of goods manufactured

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

debited

Unadjusted cost of goods sold is calculated by subtracting:

ending finished goods inventory from the sum of beginning finished goods inventory and cost of goods manufactured.

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

recognition of accrued property taxes

summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold

the schedule of cost of goods sold

A debit balance in Manufacturing overhead means overhead was

undersupplied

A company reports Gross margin of $100,000, Cost of goods sold of $70,000, and Selling and administrative expenses of $45,000. Net operating income (loss) is ______.

$55,000 100,000-45,000 = 55,000 (COGS irrelevant here because sales - cogs = GM)

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 cost of direct materials = beg inv + purchases - indirect materials - end inv (27,000 + 100,000 - 28,000 - 25,000 = 74,000)

Methods to dispose of underapplied or overapplied manufacturing overhead are

1. close it to Cost of goods sold 2. allocate it to Work in process, Finished goods, and Cost of goods sold

When a job is completed, its costs are transferred into

finished goods

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

non manufacturing costs

A credit balance in the Manufacturing Overhead account means overhead was

overapplied

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