When a job is completed, what account is credited? Show Raw materials inventory is a(n)_____ account reported on the _______ _____ Actual manufacturing overhead is entered on what side of the Manufacturing overhead account? A journal entry that debits Manufacturing Overhead and credits Property taxes payable would record the: Recognition of accrued property taxes A journal entry that debits Manufacturing Overhead and credits Prepaid insurance records the: expiration of prepaid factory insurance An ideal allocation base should be: After job 4260, costing of $200,000 in total and consisting of 1,000 units, was finished, 600 of the units were sold. How much cost should be transferred to Cost of Goods Sold? What is the formula for Predetermined Overhead Rate? Estimated manufacturing overhead cost divided by estimated allocation base Labor costs that are easily traced to a job are called _____ labor costs A job cost sheet contains: Materials costs charged to the job, manufacturing overhead costs charged to the job, and labor costs charged to the job. The Predetermined Overhead Rate is multiplied by the actual allocation base incurred by a job to find: Overhead applied to the job Typical cost drivers include: machine-hours, flight-hours, computer time What are the steps from the schedule of cost of goods manufactured in the order in which they appear? 1. Total manufacturing costs What is the debited journal entry to record the purchase of materials? What costs can be directly traced to a particular product? Direct labor, Direct materials When a job is completed, its costs are transferred into: When overhead is overapplied, manufacturing overhead must be _____ to close out the account Into what three categories do companies generally classify manufacturing costs? Manufacturing overhead, Direct materials, Direct labor The document that records materials, labor, and manufacturing overhead costs are charged to a job is the: What accounts are debited in the journal entry to record issuing both direct and indirect materials to be used in production? Work in process and manufacturing overhead List the items from the Income statement in the order in which they should appear. 1. Sales The schedule of costs 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 **The cost of goods sold summarizes costs that remain in Finished goods Inventory and that have been transferred to Costs of goods Sold Manufacturing overhead consists of all: manufacturing costs other than direct labor and direct materials **Only manufacturing costs go into manufacturing overhead What categories of costs contain labor charges that cannot be easily traced to a job? indirect labor, manufacturing overhead a factor that causes overhead costs to occur What facts are true about manufacturing overhead? It must be a manufacturing cost, it must be an indirect cost, it can include materials and labor **Indirect materials and indirect labor are both include in manufacturing overhead Smith inc. uses a job-order costing system with the predetermined overhead rate of $12 per machine hour. The job cost sheet for Job #4A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor hours, and 1,100 machine hours. The total cost of Job #4A is? $43,200 Total cost of Job #4A = Direct Materials + Direct Labor + Predetermined overhead rate x Actual machine-hours = $18,000 + $12,000 + ($12 per machine-hour x 1,100 machine-hours) = $43,200 What account is debited for the issuance of direct materials? Work in process **Raw materials is credited when raw materials are issued The journal entry to record the allocation overapplied or underapplied overhead involves what accounts? Finished goods, Work in process, Cost of goods sold, and Manufacturing overhead The journal entry to record the incurrence of general selling and administrative costs would: debit an expense account and credit cash or liability **General selling and administrative costs are not manufacturing costs. True or False: Manufacturing overhead costs consist of all manufacturing costs other than direct materials and direct labor. A journal entry that debits Manufacturing overhead and credits Accounts payable could record which transactions? The incurrence of rent on factory equipment, the incurrence of factory utilities Administrative costs are treated as: What categories are widely used allocation bases in manufacturing? Machine hours, Units of production, Direct labor cost, Direct labor hours What methods can be used to dispose of underapplied or overapplied manufacturing overhead? Closing it out to costs of goods sold. Allocating it among Work in process, Finished goods, and Cost of goods sold. What account is debited for the issuance of indirect materials? Why do companies use a Predetermined overhead rate rather than an actual overhead rate? An actual overhead rate is not known until the end of the year. **An actual rate would be more accurate The United States requires _____ costing for tax reports. A multiple predetermined overhead rate system is more accurate than a plantwide overhead rate system because it: reflects differences in how overhead costs are incurred within departments Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. Work in process contained 10% of applied overhead, Finished goods contained 40%, and Cost of goods sold contained 50%. The entry to dispose of underapplied or overapplied overhead using the allocation method would: debit Work in process $500 **Overhead is underapplied by $5,000. To dispose of the underapplied overhead, overhead is credited and the other accounts including Work in process, Finished goods, and Cost of goods sold are debited by $500 (10%), $2,000 (40%), and $2,500 (50%), respectively. An accurate calculation of the cost of an order is important to a company because they need to ensure that the sales ____ of the order exceeds the cot of the order. True or False: Job-order costing can only be used in manufacturing firms True or False: Underapplied or Overapplied overhead occurs because the method of applying overhead cost to jobs assumes that actual overhead costs will be proportional to the actual amount of allocation base incurred during the period. True or False: When materials are purchased they are recorded in the Raw materials inventory account True or False: Raw materials used in production are transferred to Work in process True or False: Raw materials only include the cost of direct materials True or False: Direct labor costs flow through the raw materials inventory account True or False: Raw materials include any materials that are used in production - both direct and indirect. The journal entry to record depreciation on office equipment would: debit Depreciation expense and credit Accumulated depreciation ___ __ ____ ______ includes all manufacturing costs of goods finished during the period Cost of goods manufactured _______ _____ inventory consists of completed units that have not yet been sold. True or False: Job ordering costing can only be used in manufacturing firms The unit product cost is the same as the: total job cost divided by number of units, average product cost per unit. **Only variable costs would be incurred if another unit were produced, and the unit product cost contains fixed costs A journal entry that debits Work in process and credits Manufacturing overhead is recording the: application of manufacturing overhead costs Jones company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for job #42 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of Job #42 is: What information is contained on a time ticket? The number of jobs worked on, the nature of indirect tasks worked, the amount of time spent on each job What are the advantages of each method of disposing underapplied or overapplied overhead? Closing to Cost of goods sold is simpler, and allocating is more accurate. A journal entry that debits Advertising expense and credits Cash would record the incurrence of a: The cost of goods _______ is the sum of all amounts transferred from Work in process to Finished goods during a period. Himber inc. just completed a job that cost $14,000 in direct materials, $12,000 in direct labor, and $8,000 in applied manufacturing overhead. The journal entry to record completion of the job would: debit finished goods $34,000 and credit Work in process $34,000 **Finished goods, including direct materials, direct labor and manufacturing overhead, should be $34,000 A _____ ______ is a document used to record how long workers spend on each job and task. To keep track of labor time and costs, many firms have replaced: paper time tickets with computerized systems Estimated Manufacturing overhead - $500,000 Actual Manufacturing Overhead - $625,000 Based on the information presented above, calculate the amount that overhead was overapplied or underapplied. $25,000 overapplied **($500,000/200,000) = $2.50 x 260,000 = $650,000 applied - $625,000 actual = $25,000 overapplied. A normal costing system applies overhead by job by multiplying a(n) _____ _______ rate by the ______ amount of the allocation base incurred by the job. predetermined overhead; actual What is a more accurate method of closing out the balance in manufacturing overhead? Allocating it among Work in process, Finished goods, and Cost of goods sold. What accounts are included when the allocation method is used to close the underapplied or overapplied balance remaining in Manufacturing Overhead at the end of the period? Finished Goods, Work in process, Cost of goods sold **Sales revenue is not involved in the allocation of overapplied or underapplied overhead. What is the formula for predetermined overhead rate? Estimated manufacturing overhead cost divided by estimated allocation base Match each event in the process of accounting for manufacturing overhead with the appropriate entry. 1. A job competed A. Manufacturing overhead is closed 1. A job is completed: B. Manufacturing overhead is credited ____ __ ______ consists of units that are only partially complete A journal entry that involved Manufacturing overhead, Work in process, Finished goods, and Cost of goods sold is recorded to: dispose of underapplied or overapplied overhead **recognize the completion of goods involves Work in process and Finished goods inventory. What are used to calculate goods available for sale on the schedule of cost of goods sold? Cost of goods manufactured, Beginning finished goods inventory **Ending finished goods inventory would be subtracted from goods available for sale to obtain cost of goods sold A company incurred $10,000 in direct labor costs and $8,000 in indirect labor costs. The journal entry to record this transaction would be: Debit Work in process $10,000 and Manufacturing overhead $8,000 and credit Salaries and wages payable $18,000 What are materials requisitions forms used for? Controlling the flow of materials into production, and Making entries in the accounting records True or False: Materials requisition forms are used for specifying the cost of materials to be ordered False **materials requisition forms specify the type and quantity of materials to be drawn from the storeroom, not the cost of materials to be ordered True or False: Materials requisition forms are used for summarizing the cost of a job False **Materials requisition forms only identify jobs that will be charged for the cost of materials. It is the job cost sheet that is used to summarize the cost of a job. The measure of activity that is used to assign overhead costs to products and services is a(n) _______ _____ Estimated Manufacturing Overhead - $500,000 $2.00 per direct labor dollar **The formula is estimated manufacturing overhead/Estimated allocation base In a system that uses multiple predetermined overhead rates, overhead is applied: in each department as jobs proceed through the department Put the steps for calculating direct materials on the schedule of cost of goods manufactured in order 1. Raw materials inventory, beginning When goods are sold on account, what accounts need to be credited? Finished goods and Sales revenue **Cost of goods sold and accounts receivable are debited What would be included in the entry to record actual manufacturing overhead?To calculate manufacturing overhead, you need to add all the indirect factory-related expenses incurred in manufacturing a product. This includes the costs of indirect materials, indirect labor, machine repairs, depreciation, factory supplies, insurance, electricity and more.
What is manufacturing overhead in accounting?Manufacturing overhead (MOH) cost is the sum of all the indirect costs which are incurred while manufacturing a product. It is added to the cost of the final product along with the direct material and direct labor costs.
Which of the following costs is an example of a manufacturing overhead cost?Some examples of manufacturing overhead costs include the following: depreciation, rent and property taxes on the manufacturing facilities. depreciation on the manufacturing equipment. managers and supervisors in the manufacturing facilities.
What side of the manufacturing overhead account is actual manufacturing overhead entered on?What side of the Manufacturing overhead account is actual manufacturing overhead entered on? Applied overhead goes on the credit side. Manufacturing overhead of $120,700 was applied to production using the company's predetermined overhead rate.
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Match each event in the process of accounting for manufacturing overhead with the appropriate entry.
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