Chapter 7 final

Question 1

Computing the cost of a job:

Answer 1

1. Direct materials - assigned
2. Direct labor - assigned
3. Manufacturing overhead (indirect materials, indirect labor, other) - allocated

Question 2

Three inventory accounts:

Answer 2

1. Raw Materials
2. Work- in - process
3. Finished Goods

Question 3

Manufacturing overhead account

Answer 3

1. Debits to account reflect actual indirect materials, indirect labor or other (utilities, depreciation, prepaids, etc.)
2. Credits to account reflect applied overhead based on the predetermined overhead rate

Question 4

Underapplied overhead

Answer 4

when the actual overhead costs incurred (debits) are in excess of the applied overhead costs (credits)
- Writeoff to COGS
Dr. Cogs
Cr. manufacturing overhead

Question 5

Overapplied overhead

Answer 5

when the applied overhead costs (credits) are in excess of the actual overhead costs incurred (debits)
- Write-off to COGS
Dr. Manufacturing overhead
Cr. COGS