Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 2, Problem 9MC
To determine
Concept introduction:
Job order costing is applied to the businesses which manufactured the product or provide the services according to the client’s order. As its names suggest, Job order costing is costing done for a particular job.
To choose:
The true statement.
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1. Compute the underapplied or overapplied overhead.
[Underapplied OR Overapplied] [$ ]
2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry.
Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account. (Note: Enter debits before credits.)
Event
General Journal
Debit
Credit
1
3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry.
Record the allocation of the underapplied/overapplied overhead to various accounts. (Note: Enter debits before credits.)
Event
General Journal
Debit
Credit
1
4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to…
QUESTION 1:
Identify the right answer for the following statements.
The salary of the director of a manufacturer is part of the manufacturing
overhead costs.
The depreciation on the machines used on the manufacturing line is
considered to be indirect manufacturing cost.
Manufacturing overhead costs are also known as indirect manufacturing
costs.
Commissions paid to sell products are reported as part of the cost of goods
sold.
True False
True False
True False
True False
Manufacturing overhead must be assigned to both work-in-process inventory True False
and finished goods inventory for external financial reporting purposes.
Chapter 2 Solutions
Managerial Accounting
Ch. 2 - What is the difference between job order and...Ch. 2 - What types of companies are likely to use job...Ch. 2 - What types companies are likely to use process...Ch. 2 - Many service industries use job order costing to...Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Prob. 18QCh. 2 - Prob. 19QCh. 2 - Prob. 20QCh. 2 - Prob. 21QCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MCCh. 2 - Prob. 4MCCh. 2 - Prob. 5MCCh. 2 - Prob. 6MCCh. 2 - Prob. 7MCCh. 2 - Applied overhead costs are recorded a. On the left...Ch. 2 - Prob. 9MCCh. 2 - Prob. 10MCCh. 2 - Identifying Companies That Use Job Order versus...Ch. 2 - Prob. 2MECh. 2 - Prob. 3MECh. 2 - Prob. 4MECh. 2 - Prob. 5MECh. 2 - Prob. 6MECh. 2 - Prob. 7MECh. 2 - Prob. 8MECh. 2 - Prob. 9MECh. 2 - Prob. 10MECh. 2 - Prob. 11MECh. 2 - Calculating Over- or Underapplied Overhead Costs...Ch. 2 - Prob. 13MECh. 2 - Prob. 14MECh. 2 - Prob. 15MECh. 2 - Calculating Direct Materials Used in Production...Ch. 2 - Calculating Missing Amounts and Cost or Goods...Ch. 2 - Prob. 19MECh. 2 - Prob. 1ECh. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 3ECh. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 5ECh. 2 - Finding Unknown Values in the Cost of Goods...Ch. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Calculating the Cost of Finished and Unfinished...Ch. 2 - Computing Overhead Rate and Billing Rate for...Ch. 2 - Prob. 13ECh. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Prob. 21ECh. 2 - Preparing Journal Entries Floyds Auto Repair Shop...Ch. 2 - Applying Job Order Costing in a Service Setting...Ch. 2 - Prob. 24ECh. 2 - Prob. 1.1GAPCh. 2 - Prob. 1.2GAPCh. 2 - Prob. 1.3GAPCh. 2 - Prob. 1.4GAPCh. 2 - Prob. 1.5GAPCh. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 3.1GAPCh. 2 - Prob. 3.2GAPCh. 2 - Prob. 3.3GAPCh. 2 - Prob. 3.4GAPCh. 2 - Prob. 3.5GAPCh. 2 - Prob. 4.1GAPCh. 2 - Prob. 4.2GAPCh. 2 - Prob. 4.3GAPCh. 2 - Prob. 5.1GAPCh. 2 - Prob. 5.2GAPCh. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Prob. 5.4GAPCh. 2 - Prob. 6GAPCh. 2 - Prob. 7.1GAPCh. 2 - Prob. 7.2GAPCh. 2 - Prob. 7.3GAPCh. 2 - Prob. 7.4GAPCh. 2 - Prob. 7.5GAPCh. 2 - Prob. 8.1GAPCh. 2 - Prob. 8.2GAPCh. 2 - Prob. 8.3GAPCh. 2 - Prob. 8.4GAPCh. 2 - Prob. 8.5GAPCh. 2 - Prob. 1.1GBPCh. 2 - Prob. 1.2GBPCh. 2 - Prob. 1.3GBPCh. 2 - Prob. 1.4GBPCh. 2 - Prob. 1.5GBPCh. 2 - Prob. 2GBPCh. 2 - Prob. 3.1GBPCh. 2 - Prob. 3.2GBPCh. 2 - Prob. 3.3GBPCh. 2 - Prob. 3.4GBPCh. 2 - Prob. 3.5GBPCh. 2 - Prob. 4.1GBPCh. 2 - Prob. 4.2GBPCh. 2 - Prob. 4.3GBPCh. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Prob. 5.4GBPCh. 2 - Prob. 6GBPCh. 2 - Prob. 7.1GBPCh. 2 - Prob. 7.2GBPCh. 2 - Prob. 7.3GBPCh. 2 - Prob. 7.4GBPCh. 2 - Prob. 7.5GBPCh. 2 - Prob. 8.1GBPCh. 2 - Prob. 8.2GBPCh. 2 - Prob. 8.3GBPCh. 2 - Prob. 8.4GBPCh. 2 - Prob. 8.5GBP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts. a. b. None of given answer is correct. С. Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. d. Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be the same under either method. Clear my choicearrow_forwardWhich of the following is correct with respect to Time left 1:59:07 closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in- Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? а. Cost of Goods Sold will be higher if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. O b. The balance in the Work-in-Process account after allocation will be the same under either method. O c. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. d. The balance in the Work-in-Process account after allocation will be higher if the underapplied overhead is closed out by allocating it to all appropriate accounts. e. None of given answer is correct.arrow_forwardTrue or False. When the underapplied overhead is assigned to Cost of Goods Sold the effect is to increase the balance on the Cost of Goods Sold account.arrow_forward
- In the Excel, or spreadsheet, approach to recording financial transactions, if manufacturing overhead is underapplied by X dollars, the Manufacturing Overhead account is closed out by deducting X dollars in the Manufacturing Overhead column and deducting X dollars in the Retained Earnings column. True or False True Falsearrow_forwardI.-The Materials Inventory account will be debited for the materials used in production II.-The Material Inventory account will be credited for materials purchases. a. Both statements are true b. Both statements are false c. Only statement I is true d. Only statement II is truearrow_forwardTwo different questions..arrow_forward
- A. Multiple Choice:Write the letter of the correct answer in the given worksheet. When the amount of overapplied manufacturing overhead as significant, the netry to close Overapplied Manufacturing Overhead will most likely require: a. A debit to Cost of Goods Sold b. Debits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory C. A credit to Cost of Goods Sold d. Credit to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory. An objection to the use of predetermined overhead rate based on direct labor costs is that a. These items are difficult to measure. b. A job is charged with more overhead when a highly paid operator works on the job than when a low paid operator performs the work. C. Overhead is allocated in relation to units produced by workers. d. Overhead rate will be distributed inequitable when there are no wage differentials in the department. 3. All of the following phrases are used as alternate terminology for manufacturing…arrow_forwardThe adjustment of underapplied manufacturing overhead cost results in all :the following, EXCEPT none of the given answers .increase in net operating income .b .decrease in net operating income .c increase in cost of goods sold .d Oarrow_forwardI. The Cost of Goods Sold of a Merchandising company will include cost of Materials, Labor and Factory Overhead. II. A Merchandising company's Cost of Goods Sold will include Purchases.A. Statement I is false while statement II is true.B. Both statements are true.C. Both statements are false.D. Statement I is true while statement II is false.arrow_forward
- The general manager of the company requested the amount of "total cost of manufacturing" from the accounting manager and received a report about it. Then he asked for the amount of "cost of goods manufactured". However, the accounting manager said, "There is no need to calculate it, since it is the same as the total cost of manufacturing". Do you agree with the accounting manager's reply? (No need to calculate) Direct materials purchased Indirect labor cost Direct labor cost Manufacturing overhead cost Direct materials used Work-in-process inventory, beginning Work-in-process inventory, ending Number of units sold Number of units produced $200,000 $150,000 $230,000 $210,000 $180,000 $26,000 $26,000 9,600 10,000arrow_forwardWhich 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.arrow_forwardThese are tue/false questions. ____ 21. Differential revenue is the amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative. ____ 22. Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period. ____ 23. One of the differences in accounting for a process costing system compared to a job order system is that the amounts used to transfer goods from one department to the next comes from the cost of production report instead of job cost cards. ____ 24. The primary accounting tool for controlling and reporting for cost centers is a budget performance report. ____ 25. The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.arrow_forward
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