Match each description to the appropriate term. Answers may be used more than once. Selling and administrative expense Factory overhead Indirect materials used Sales supplies used Rent expense on factory building Factory supplies used

Match each description to the appropriate term. Answers may be used more than once. Selling and administrative expense Factory overhead Indirect materials used Sales supplies used Rent expense on factory building Factory supplies used

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Match each description to the appropriate term. Answers may be used more than once.

Selling and administrative expense

Factory overhead

Indirect materials used

Sales supplies used

Rent expense on factory building

Factory supplies used

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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Please answer D
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Which document shows the cost of direct materials, direct labor, and overhead applied for each specific job?A. job cost sheetB. purchase orderC. materials requisition formD. receiving document
Which of the following statements is true? (You may select more than one answer.)a. The Manufacturing Overhead account is debited when manufacturing overhead isapplied to Work in Process.b. Job cost sheets accumulate the actual overhead costs incurred to complete a job.c. When products are transferred from work in process to finished goods it results ina debit to Finished Goods and a credit to Work in Process.d. Selling expenses are applied to production using a predetermined overhead ratethat is computed at the beginning of the period.
Number the following in the order of the flow of manufacturing costs for a company: a. Closing under/overapplied factory overhead to cost of goods sold b. Materials purchased c. Factory labor used and factory overhead incurred in production d. Completed jobs moved to finished goods e. Factory overhead applied to jobs according to the predetermined overhead rate f. Materials requisitioned to jobs g. Selling of finished product h. Preparation of financial statements to determine gross profit
2. The entry to assign the costs of indirect labor for the janitor responsible for cleaning the factory where a manufacturer makes cars would include a debit to which account? O manufacturing overhead O work-in-process inventory O finished goods inventory Owages payable
The journal entry for adjustment of underallocated manufacturing overhead includes a: A) credit to Finished Goods Inventory. B) credit to Manufacturing Overhead. C) debit to Work-in-Process Inventory. D) credit to Cost of Goods Sold.
Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
Concepts and terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Materials for use in production are called (supplies, materials inventory). An example of factory overhead is (electricity used to run assembly line, CEO salary).
The entry to record the purchase of raw materials on account using a job costing system would include a credit to Work-in-Process Inventory account. debit to Accounts Payable account. debit to Work-in-Process Inventory account. debit to Raw Materials Inventory account.