Chapter 3 Multiple Choice

The journal entry to record the completion of production involves a debit to:

Finished Goods Inventory

In a normal cost system, a debit to Work in Process inventory would be made for:

-Applied overhead, Actual direct material, Actual direct labor.

Overapplied overhead will result if:

Factory overhead costs incurred were less than overhead costs charged to production

Beginning work in process plus total current period manufacturing costs less ending work in process equals:

Cost of goods manufactured

Product costs that appear on the income statement are part of:

Cost of goods sold

If a company sells more units that it produces, the ending inventory will:

Decrease

A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material Inventory. The explanation for this would be that:

Direct material was placed into production

Cost associated with selling and general administrative activities are:

Period costs, Nonmanufacturing costs, Period costs and nonmanufacturing costs

Which of the following are product cost components?

Rent on a factory building, Indirect production labor wages, Janitorial supplies used in a factory.

A credit to Work in Process Inventory Represents:

The transfer of completed items to Finished Goods Inventory

If the amount of underapplied or overapplied overhead is significant at the end of the accounting period, the accountant should close the balance by allocating it pro rata among:

WIP, finished goods, and COGS