ACCT 2302 Chapter 2 Smart Book PDF

Preview

Summary

Homework assignment for ACCT 2302...

Description

ACCT 2302 CHAPTER 2 SMARTBOOK A cost driver is __________. A MEASURE THAT EXPLAINS OR INFLUENCES THE AMOUNT OF MANUFACTURING OVERHEAD COST INCURRED A direct labor time ticket includes the __________. JOB NUMBERS OF JOBS WORKED ON; AMOUNT OF TIME SPENT ON EACH JOB A predetermined overhead rate of $20 per direct labor hours means that __________. FOR EACH DIRECT LABOR HOUR, $20 IS ADDED TO COVER INDIRECT COSTS Actual manufacturing overhead consists of all __________. MANUFACTURING COSTS OTHER THAN DIRECT LABOR AND DIRECT MATERIALS Actual manufacturing overhead costs are accumulated on the __________ side of the Manufacturing Overhead account and applied costs are shown on the __________ side. DEBIT; CREDIT All materials that will be used in future production are first recorded in the (RAW MATERIALS) inventory account An allocation base is a(n) __________. MEASURE OF ACTIVITY USED TO ASSIGN OVERHEAD COSTS TO PRODUCTS AND SERVICES As jobs are worked on, the Work in Process account accumulates __________. ACTUAL DIRECT MATERIALS, ACTUAL DIRECT LABOR, AND APPLIED OVERHEAD COSTS Because service firms tend to be labor-intensive, the primary driver used to assign cost is (BILLABLE HOURS) Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000. $186,000 Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit. $100,000 Categories of manufacturing costs include __________. DIRECT LABOR; MANUFACTURING OVERHEAD; DIRECT MATERIALS

Companies that use job-order costing __________. MAKE UNIQUE PRODUCTS Cost of goods (MANUFACTURED) is the total cost of jobs completed during the period. Cost of goods manufactured is the __________. VALUE OF ALL JOBS TRANSFERRED FROM WORK IN PROCESS TO FINISHED GOODS Cost of goods manufactured is the __________. VALUE OF ALL JOBS TRANSFERRED FROM WORK IN PROCESS TO FINISHED GOODS Cost of partially completed units are accounted for in __________. WORK IN PROCESS Costs are transferred from raw materials inventory to __________. EITHER WORK IN PROCESS OR MANUFACTURING OVERHEAD Costs are transferred out of Finished Goods inventory __________. WHEN GOODS ARE SOLD Direct costs are __________ to products, and overhead costs are __________. TRACED; APPLIED 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 Factory labor charges that cannot be easily traced to a job are treated as __________. MANUFACTURING OVERHEAD Finished goods __________. CONSISTS OF COMPLETED, UNSOLD GOODS Gemini had Sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Calculate gross profit. $30,000 Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000. $260,000 Given the following, compute the cost of goods manufactured. Direct material cost: $40,000; Direct labor cost: $100,000; Applied overhead: $120,000; Beginning work in process inventory: $30,000; Ending work in

process inventory: $12,000. $278,000 ($30,000+$40,000+$100,000+ $120,000-$12,000=$278,000) 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. $228,000 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. $395,000 Hands-on work that can be easily traced to a specific product is called (DIRECT LABOR). Ideally an allocation base should __________. EXPLAIN OR INFLUENCE THE AMOUNT OF OVERHEAD INCURRED If the manufacturing overhead account has a __________ balance at the end of the period that indicates that overhead was underapplied and cost of goods sold must be __________. DEBIT; INCREASED If the Manufacturing Overhead account has a credit balance at the end of the period that indicated that overhead was __________ and cost of goods sold must be __________. OVERAPPLIED; DECREASED If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was (OVERAPPLIED) If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs it means overhead was (UNDERAPPLIED) In a service firm, salaries of administrative personnel, rent and utilities, and nonbillable employee time are __________. TREATED LIKE MANUFACTURING OVERHEAD In a service firm, salaries of administrative personnel, rent and utilities, and nonbillable employee time are __________. ASSIGNED TO CLIENT OR ACCOUNT USING AN ALLOCATION BASE Labor costs __________. ARE RECORDED IN BASICALLY THE SAME WAY AS MATERIAL COSTS; MAY BE DIRECT OR INDIRECT Major inputs such as lumber and fixtures that can be easily traced to a specific job are called (DIRECT MATERIALS).

Managers need (COST/FINANCIAL/ACCOUNTING) information to budget and control spending. Manufacturing overhead costs __________. INCLUDE SOME MATERIALS AND LABOR; MUST BE MANUFACTURING COSTS; ARE INDIRECT COSTS Materials requisition forms are used to __________. RECORD THE COST OF RAW MATERIALS IN THE ACCOUNTING SYSTEM; CONTROL THE FLOW OF MATERIALS FROM INVENTORY INTO PRODUCTION Nonmanufacturing costs increase __________. THE SELLING, GENERAL & ADMINISTRATIVE EXPENSE ACCOUNTS Nonmanufacturing costs incurred during a period are treated as __________. PERIOD EXPENSES On the job cost sheet and work in process accounts, the __________ manufacturing overhead is recorded. APPLIED Predetermined overhead rates are __________. BASED ON SOME SECONDARY ALLOCATION MEASURE Process costing __________. IS USED FOR MASS PRODUCTION; IS USED FOR HOMOGENEOUS PRODUCTS 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 indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $74,000 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 The balance of work in process inventory may be calculated by __________. SUMMING THE COSTS OF ALL JOBS IN PROCESS The basic formula for process costing is __________. AVERAGE UNIT COST = TOTAL MANUFACTURING COST / TOTAL UNITS PRODUCED The cost of goods (MANUFACTURED) is the sum of all amounts transferred from work in process to finished goods during a period.

The cost of goods (MANUFACTURED) is the sum of all amounts transferred from work in process to finished goods during a period. The cost of goods (MANUFACTURED) report summarizes the flow of manufacturing costs from raw materials to work in process inventory and into finished goods. The cost of goods manufactured report includes __________ manufacturing overhead costs. APPLIED The cost of jobs that have been completed but not yet sold are contained in (FINISHED GOODS) inventory. The difference between overhead applied to jobs and actual overhead is __________. OVERAPPLIED OR UNDERAPPLIED OVERHEAD The document used to record the time workers spend on each job and task is a __________. DIRECT LABOR TIME TICKET The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to __________. DETERMINE THE COST DRIVER The formula for a predetermined overhead rate is __________. ESTIMATED TOTAL MANUFACTURING OVERHEAD COST / ESTIMATED TOTAL COST DRIVER The main difference between job order and process costing is __________. WHETHER THE PRODUCTS PRODUCED ARE SIMILAR OR DIFFERENT The major difference between job order and process costing is __________. WHETHER THE PRODUCTS PRODUCED ARE SIMILAR OR DIFFERENT The most common driver used to assign costs in a service firm is __________. BILLABLE HOURS The most common method for disposing of the balance in manufacturing overhead is __________. ADJUSTING COST OF GOODS SOLD The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the __________ the job. OVERHEAD APPLIED TO The total cost transferred out of Work in Process inventory into Finished Goods inventory is __________. COST OF GOODS MANUFACTURED The work in process account accumulates __________. ACTUAL DIRECT MATERIALS, ACTUAL DIRECT LABOR, AND APPLIED OVERHEAD COSTS

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the __________. ESTIMATED TOTAL COST DRIVER 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 True of False: The Manufacturing Overhead account is a temporary account used to accumulate actual and applied overhead costs. TRUE True or False: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour. FALSE True or False: Job-order costing can only be used in manufacturing firms. FALSE True or False: Job-order processing can only be used in manufacturing firms. FALSE True or False: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process. FALSE True or False: Service industries use cost information to determine the profitability of different types of clients. TRUE True or False: The cost of each individual unit is tracked to products under both job order and process costing. FALSE Underapplied or overapplied overhead is the __________. DIFFERENCE BETWEEN OVERHEAD APPLIED TO JOBS AND ACTUAL OVERHEAD What document specifies the type and quantity of direct materials used on a specific job? MATERIALS REQUISITION FORM What is the formula for applying overhead to a specific job? PREDETERMINED OVERHEAD RATE X THE ACTUAL COST DRIVER USAGE FOR THE SPECIFIC JOB What is the most common method for disposing of the balance in Manufacturing Overhead? MAKING A DIRECT ADJUSTMENT TO COST OF GOODS SOLD When a job is completed, its costs are transferred into __________. FINISHED GOODS

When a job is completed, its costs are transferred out of __________. WORK IN PROCESS When actual manufacturing overhead costs are incurred, __________. THE MANUFACTURING OVERHEAD COST IS DEBITED When calculating predetermined overhead rate, the ideal allocation base should be a(n) (COST DRIVER) When goods are sold to customers, __________. COSTS ARE TRANSFERRED FROM FINISHED GOODS TO COST OF GOODS SOLD When is the predetermined overhead rate calculated? BEFORE THE PERIOD BEGINS When materials are purchased they are first recorded in the __________ account. RAW MATERIALS INVENTORY When materials are requisitioned into production, __________. DIRECT MATERIALS ARE RECORDED IN WORK IN PROCESS; DIRECT MATERIALS ARE RECORDED ON THE JOB COST SHEET Which methods can be used to dispose of underapplied or overapplied manufacturing overhead? MAKE A DIRECT ADJUSTMENT TO COST OF GOODS SOLD; ALLOCATE IT TO WORK IN PROCESS, FINISHED GOODS, AND COST OF GOODS SOLD Which of the following is not a manufacturing cost category? SELLING & ADMINISTRATIVE COSTS Which of the following statements are true? 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 Which of the following would most likely NOT be classified as a direct material? NAILS AND SCREWS Which of the following would NOT be classified as manufacturing overhead? TIRES USED TO MAKE VEHICLES Which of the following would not be considered a job in a service firm that uses job-order costing? THE TAX DEPARTMENT IN AN ACCOUNTING FIRM Which of the following would NOT be part of direct labor cost? SUPERVISOR SALARIES...