Chapter 3 Learn Smart

Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?

$65,000

a journal entry that includes Manufacturing Overhead and Cost of Goods Sold is recorded to:

dispose of underapplied or over-applied overhead

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

ending raw materials inventory and indirect materials used

manufacturing overhead costs include

- Factory insurance - The factory supervisor's salary

what methods can be used to dispose of underapplied or overapplied manufacturing overhead?

- closing it out to cost of goods sold -allocating it among work in process, finished goods, and cost of goods sold.

direct materials used for the period cost $66,000. Direct labor cost $80,000. Applied overhead was $60,000. Beginning work in process inventory was $27,000 and ending work in process inventory was $25,000. Calculate the cost of goods manufactured.

208,000

when overhead is underapplied, a ___ must be made to the manufacturing overhead account to close it out

credit

underapplied or overapplied overhead is the

difference between overhead applied to work in process and actual overhead

labor costs charged to manufacturing overhead represent

indirect labor costs

the difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

a journal entry that debits Raw Materials and credits Accounts Payable is recording the

purchase of materials

a journal entry that debits manufacturing overhead and credits property taxes payable records the

recognition of accrued property taxes

a journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record:

rent expense on factory equipment factory utilities expense

net operating income is calculated by subtracting ___ from ____

selling and administrative expenses gross margin

units of product that are only partially complete are contained in the _____ _____ ____ Inventory

work in process

actual overhead costs may not be proportional to the actual amount of the allocation base used because

-many actual overhead costs are fixed -overhead spending may not be under control

raw materials is an ____ account

asset

when preparing financial statements in a job-order costing system, finished goods flow first to the ___ _____ and then to the ___ ____

balance sheet income statement

A journal entry that debits Manufacturing overhead and credits Prepaid insurance records the:

expiration of prepaid factory insurance

the journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ___ and credits cash

insurance expense

the cost of goods __ is the sum of all amounts transferred from work in process to finished goods during a period

manufactured

the journal entry to record the purchase of materials debits:

raw materials

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

subtracted from raw materials used in production

When a job is completed, the job costs are transferred out of:

work in process

Fila Inc, worked on 3 jobs this period: Job 14C, which cost $15,000 Job 23A, which cost $28,000 and Job 45B, which cost $23,000 At the end of the period, only Job 14C was still in process. The costs of goods manufactured this period is

51,000

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 the indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period

74,000

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

manufactured

when the allocation method is used to close out the underapplied or overapplied balance remaining in Manufacturing Overhead, which accounts are affected?

-work in process -finished goods -cost of goods sold

Milton Corporation sold goods costing $50,000 for $75,000. Journal entries to be made could include entries debiting:

Cost of Goods Sold for $50,000 and Accounts Recievable for $75,000

which are used to calculate cost of goods available for sale on the schedule of cost of goods sold?

beginning finished goods inventory, cost of goods manufactured

the journal entry to record the purchase of materials credits:

accounts payable

a journal entry that debits work in process and credits manufacturing overhead is recording the

application of manufacturing overhead costs

The ____ side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the ____ side is always used to record the actual manufacturing costs incurred

credit / debit

if overapplied overhead is closed out to Cost of Goods Sold, the Cost of Goods sold account will be [increased/decreased]

decreased