Chapter 3 accounting

as they are incurred

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______________.

as they are incurred

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ________________.

raw materials

Any purchased materials that will go into the finished product are first recorded in the _____________ _______________ inventory account

$395,000

Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

Net Operating Income

Gross margin minus selling and administrative expenses equals _______________.

$120,000

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 ______________.

indirect

Labor costs charged to Manufacturing Overhead represent ___________ labor costs.

manufacturing costs other than direct labor and direct materials

Manufacturing overhead consists of all ______________.

the factory supervisor's salary and factory insurance

Manufacturing overhead costs include 1. the factory supervisor's salary 2. factory insurance 3. direct materials 4. office equipment depreciation 5. the CEO's salary

1. factory rent 2. factory maintenance wages 3. factory utilities

Manufacturing overhead costs include ___________. 1. factory rent 2. assembly worker wages 3. marketing costs 4. factory maintenance wages 5. factory utilities

$74,000

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.

period expenses

Selling and administrative costs incurred are treated as ________________.

sold

The schedule of cost of goods ______________ 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.

manufactured

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.

ending raw materials inventory and Indirect materials used

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract _______________.

ending finished goods inventory from goods available for sale.

Unadjusted cost of goods sold is calculated by subtracting:

Always the debit side

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

Always the credit side

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

finished goods

When a job is completed, its costs are transferred into _________________.

work in process

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

subtracted from raw materials used in production.

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is:

direct

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

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

When only a portion of the units involved in a job are sold, the ___________________.

Manufacturing Overhead

Which account is credited when manufacturing overhead is applied?

Nonmanufacturing costs

Which of the following would not be charged to the Manufacturing overhead account? 1. Supervisor's salary 2. Depreciation on factory equipment 3. Nonmanufacturing costs 4. Factory rent

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

Which of the statements regarding closing out over or underapplied overhead is correct? 1. Both methods are equally accurate. 2. Closing to Cost of goods sold is simpler, and allocating is more accurate. 3. Allocating is simpler, and closing to Cost of goods sold is more accurate. 4. Both methods are equally simple.

1. Raw materials inventory represents the cost of materials not yet used in production. 2. When materials are purchased they are recorded in the Raw materials inventory account.

1. Raw materials inventory represents the cost of materials not yet used in production. 2. Raw materials inventory only includes the cost of direct materials. 3. When materials are purchased they are recorded in the Raw materials inventory account. 4. Raw materials inventory represents the cost of materials not yet used in production.

$16,000

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.

overapplied or underapplied overhead

The difference between overhead applied to work in process and actual overhead is _______________.

Work in process $10,000 and credits Manufacturing overhead $10,000

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ___________________.

Accounts Payable

The journal entry to record the purchase of materials credits _______________.

raw materials

The journal entry to record the purchase of materials debits _________________.

allocating it among Work in process, Finished goods, and Cost of goods sold.

The more accurate method of closing out the balance in Manufacturing overhead is: