Chapter 3
clearing account
Another name for the income summary account because it has the effect of clearing the revenue and expense accounts of their balances.
Salary of production supervisor transaction
Debit: Manufacturing Overhead Credit: Raw Materials
Manufacturing overhead is applied to jobs using the pohr transaction
Debit: Work in Process Credit: Manufacturing overhead
Direct materials issued for a specific job
Debit: Work in Process Credit: Raw Materials
What is the journal entry to record the use of direct and indirect labor in production?
Debit: Work in Process Debit: Manufacturing Overhead Credit: Salaries and Wages Payable
What is the transaction for withdrawing $52,000 in raw materials for production and these materials included 50,000 direct and 2,000 indirect
Debit: Work in Process, 50,000 Debit: Manufacturing Overhead 2,000 Credit: Raw Materials: 52,000
Wages of direct laborers who performed a particular job transaction
Debit: Work in process Credit: Salary and Wages Payable
Indirect materials needed for a job transaction
Debit: manufacturing overhead Credit: raw materials
Where are direct labor and manufacturing overhead applied on the balance sheet?
In the work in process inventory
When a good is sold, how is it recorded?
It is put as an expense on the income statement
how are manufacturing overhead costs assigned to work in process?
Multiplying the pohr by the allocation base
Do period costs flow through inventories on the balance sheet?
No, they are recorded in the income statement in the period incurred
When a good is in inventory, how is it recorded?
On the balance sheet in inventory accounts
(T/F) all actual manufacturing overhead costs are debited to the Manufacturing Overhead account as they are incurred
True
When are raw materials transferred to work in process?
When the direct materials are used in production
When are raw materials costs transferred to Work in Process?
When they become part of the production process as direct materials
material requisition form
a document used by the production department supervisor to request the release of raw materials for production
What is the debit side of manufacturing overhead used for?
always used to record the actual manufacturing overhead costs, such as indirect materials, that are incurred during the period.
What type of account is raw materials?
an asset
raw materials
any materials that go into the final product
A journal entry that debits finished goods and credits work in process is records the:
completion of a job
schedule of cost of goods manufactured
contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and it summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.
The journal entry to record $10k in manufacturing overhead applied to a job is
debit: work in process, credit: manufacturing overhead
Where are raw materials purchased recorded?
in the raw materials inventory account
What is the credit side of manufacturing overhead used for?
is always used to record the manufacturing overhead applied to work in process.
The journal entry to record depreciation on factory equipment debits
manufacturing overhead and credits accumulated depreciation
schedule of cost of goods sold
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.
Cost of Goods Manufactured
the amount transferred from work in process to finished goods
work in process
units of product that are only partially complete and will require further work before they are ready for sale to the customer
The journal entry to record issuing both direct and indirect materials into production debits
work in process and manufacturing overhead
