SMARTBOOK ACCOUNTING 2105 CHAPTER 3

Manufacturing overhead applied to production is always recorded on the _____ side of the manufacturing overhead account and the side is always used to record the ______ actual manufacturing costs incurred.

credit debit

Manufacturing overhead costs include ______.

factory insurance the factory supervisor's salary

Manufacturing overhead consists of all ______.

manufacturing costs other than direct labor and direct materials

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

true

The journal entry to record selling and administrative salaries debits ______.

✓ an expense account and credits Cash or a liability

The Manufacturing Overhead account is debited when ______.

actual overhead costs are incurred

Finished goods ______.

consist of completed, unsold goods

Labor costs charged to Manufacturing Overhead represent ______ labor costs.

indirect

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

only direct

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

raw materials

Work in Process consists of ______.

actual direct labor cost applied manufacturing overhead actual direct materials cost

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

raw materials

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

as they are incurred

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.

purchase of materials

Which of the following statements are true?

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

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.

Manufacturing overhead $1,000 and credits Property taxes payable $1,000

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to debit ______.

Manufacturing overhead $8,000 and credit Accounts payable $8,000

The journal entry to record accrued property taxes for a factory building debits ______.

Manufacturing overhead and credits Property taxes payable

The journal entry to record issuing materials to be used in production credits ______.

Raw materials

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

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

accounts payable

Selling and administrative costs first appear on the ______.

income statement

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______.

direct labor costs Reason: The incurrence of direct labor costs should be recorded by debiting Work in process account.

Cost of goods manufactured is the ______.

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

A journal entry that debits Work in process and credits Manufacturing overhead is recording the ______.

application of manufacturing overhead costs

Costs of partially completed units are accounted for in ______.

work in process

A journal entry debiting Salaries expense and crediting Salaries and wages payable could be recording ______.

administrative salaries