Chapter 3: Managerial Account Review

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

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

A debit balance in Manufacturing overhead means overhead was _________.

undersupplied

When only a portion of the units involved in a job are sold, the ______. entire cost of the job is transferred from finished goods to cost of goods sold cost is held in the finished goods account until all units in the job are sold unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold unsold units are transferred to another job

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

Units of product that are only partially complete are contained in ____________ process inventory.

work in

Costs of partially completed units are accounted for in ______. cost of goods manufactured raw materials finished goods work in process

work in process

When a job is completed, the job costs are transferred OUT OF ______. finished goods work in process manufacturing overhead cost of goods sold

work in process

Which of the following statements are true? Raw materials inventory represents the cost of materials not yet used in production. Raw materials inventory only includes the cost of direct materials. When materials are purchased they are recorded in the Raw materials inventory account. Direct labor costs flow through the Raw materials inventory account.

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

The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next. True False

True

The journal entry to record the purchase of materials credits ______. work in process raw materials accounts payable manufacturing overhead

accounts payable

Overhead is underapplied if ______. actual overhead is more than applied overhead cost of goods manufactured is less than cost of goods sold actual overhead is less than applied overhead adjusted cost of goods sold is less than unadjusted cost of goods sold

actual overhead is more than applied overhead

Work in Process consists of ______. applied direct labor cost applied manufacturing overhead actual direct materials cost actual direct labor cost actual manufacturing overhead applied direct materials cost

applied manufacturing overhead actual direct materials cost actual direct labor cost

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______. at the end of the period when jobs are completed as the allocation base is used on a job as they are incurred

as they are incurred

Actual manufacturing overhead is ______ to the Manufacturing overhead account. credited debited

debited

Manufacturing overhead costs include ______. factory maintenance wages factory utilities factory rent marketing costs assembly worker wages

factory maintenance wages factory utilities factory rent

Completed units that have not yet been sold are found in ______________ inventory.

finished goods

Selling and administrative costs first appear on the ______. income statement statement of cash flows balance sheet statement of owners' equity

income statement

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

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

nonmanufacturing costs

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

only direct

When labor costs are incurred, _________ labor costs are added directly to the Work in Process account. both direct and indirect only direct only indirect

only direct

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______. issuance of materials into production purchase of materials sale of goods completion of goods

purchase of materials

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

raw material

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______. rent expense on factory equipment the purchase of indirect materials rent on the administrative office factory utilities expense

rent expense on factory equipment factory utilities expense

Net operating income is calculated by subtracting ______ from ______. selling and administrative expenses; gross margin selling and administrative expenses; sales cost of goods sold; sales cost of goods sold; gross margin

selling and administrative expenses; gross margin

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 subtracted from beginning Raw materials inventory added to raw materials used in production

subtracted from raw materials used in production

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 ______. $200,000 $80,000 $600,000 $120,000

$120,000

Methods to dispose of underapplied or overapplied manufacturing overhead are ______. close it to Work in process allocate it to Work in process, Finished goods, and Cost of goods sold allocate it to Raw materials, Work in process, and Finished goods close it to Finished goods close it to Cost of goods sold

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

Finished goods ______. consist of completed, unsold goods consist of goods that require additional processing before being sold is the same as cost of goods manufactured consist of goods that have been sold to customers during the period

consist of completed, unsold goods

Labor costs charged to Manufacturing Overhead represent ______ labor costs. direct both direct and indirect labor indirect

indirect

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

A journal entry that debits Work in process and credits Manufacturing overhead is recording the ______. application of manufacturing overhead costs completion of a job purchase of indirect materials incurrence of actual manufacturing overhead

application of manufacturing overhead costs

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______

issurance of materials

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

manufactured

Manufacturing overhead consists of all ______. manufacturing costs costs other than direct labor and direct materials manufacturing costs other than direct labor and direct materials indirect costs

manufacturing costs other than direct labor and direct materials

Which account is credited when manufacturing overhead is applied? Manufacturing overhead Work in process Accounts payable Cost of goods sold

manufacturing overhead

A credit balance in the Manufacturing Overhead account means overhead was ____________.

overapplied

Selling and administrative costs incurred are treated as ______. period expenses assets product costs liabilities

period expenses

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.

sold

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. 240,000 $228,000 $258,000 $252,000

$252,000

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. $425,000 $535,000 $520,000 $395,000

$395,000

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 ______. $30,000 $25,000 $55,000 $(15,000)

$55,000

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ______. Cost of goods sold $10,000 and credits Work in process $10,000 Cost of goods sold $10,000 and credits Manufacturing overhead $10,000 Work in process $10,000 and credits Manufacturing overhead $10,000 Manufacturing overhead $10,000 and credits Work in process $10,000

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

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

direct labor costs

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______. beginning raw materials inventory and Indirect materials used ending raw materials inventory and Indirect materials used only beginning raw materials inventory only ending raw materials inventory

ending raw materials inventory and Indirect materials used

Manufacturing overhead is applied with a debit to ______. Accounts payable Work in process Cost of goods sold Manufacturing overhead

work in process

What side of the Manufacturing overhead account is applied manufacturing overhead entered on? Always the credit side The credit side, if actual is greater than applied The debit side, if actual is greater than applied Always the debit side

Always the credit side

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction debits ______. Work in process $40,000, debits Manufacturing overhead $30,000 and credits Raw materials $70,000 Raw materials $70,000, credits Work in process $40,000 and credits Manufacturing overhead $30,000 Raw materials $70,000 and credits Work in process $70,000 Work in process $70,000 and credits Raw materials $70,000

Work in process $40,000, debits Manufacturing overhead $30,000 and credits Raw materials $70,000

The journal entry to record issuing both direct and indirect materials into production debits ______. Work in process and Raw materials Work in process and Manufacturing overhead Manufacturing overhead and Raw materials

Work in process and Manufacturing overhead

What side of the Manufacturing overhead account is actual manufacturing overhead entered on? Always the credit side The credit side, if actual is greater than applied The debit side, if actual is greater than applied Always the debit side

Always the debit side