ACCT 6521 Exam 1 Chapter 3 Job Order Costing – Flashcards
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The use of a predetermined overhead rate in a job-order cost system makes it possible to compute the total cost of a job before production is begun.
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FALSE
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If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements.
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FALSE
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The formula for computing the predetermined overhead rate is:
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TRUE
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When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job.
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FALSE
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The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the manufacturing overhead cost applied to the job.
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TRUE
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Job cost sheets are used to record the costs of preparing routine accounting reports.
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FALSE
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In a job-order cost system, direct labor is assigned to a job using information from the employee time ticket.
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TRUE
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The cost categories that appear on a job cost sheet include selling expense, manufacturing expense, and administrative expense.
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FALSE
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When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods.
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TRUE
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The following entry would be used to record depreciation on manufacturing equipment:
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FALSE
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The sum of all amounts transferred from the Work in Process account to the Finished Goods account represents the Cost of Goods Sold for the period.
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FALSE
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Indirect materials are charged to specific jobs.
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FALSE
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When a job is completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a debit to Work in Process.
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FALSE
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Manufacturing overhead is overapplied if actual manufacturing overhead costs for a period are greater than the amount of manufacturing overhead cost that was charged to Work in Process.
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FALSE
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If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied, then manufacturing overhead would be considered to be underapplied.
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TRUE
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Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to:
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B. overstate the predetermined overhead rate.
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Departmental overhead rates are generally preferred to plant-wide overhead rates when:
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A. the activities of the various departments in the plant are not homogeneous.
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In computing its predetermined overhead rate, Brady Company included its factory insurance cost twice. This error will result in:
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C. the Cost of Goods Manufactured to be overstated.
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Which of the following entries would correctly record the application of overhead cost?
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D. Option D
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What journal entry is made in a job-order costing system when $8,000 of materials are requisitioned for general factory use instead of for use in a particular job?
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D. Option D
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A proper journal entry to record issuing raw materials to be used on a job would be:
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C. Option C
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Which of the following entries would record correctly the monthly salaries earned by the top management of a manufacturing company?
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B. Option B
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The operations of Kalispell Company resulted in overapplied manufacturing overhead for the month just completed. Which of the following journal entries can be correct if Kalispell allocates underapplied or overapplied manufacturing overhead among the Work in Process, Finished Goods, and Cost of Goods Sold?
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D. Option D
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In a job-order costing system, the use of indirect materials that have been previously purchased is recorded as a credit to
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C. Raw Materials inventory.
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On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents:
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D. the amount of cost of goods completed during the current year whether they were started before or during the current year.
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There are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves allocation of the balance among several accounts, whereas the other closes any balance directly to:
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B. Cost of Goods Sold.
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Overapplied manufacturing overhead means that:
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B. the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.
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Buker Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: he predetermined overhead rate for the recently completed year was closest to:
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"D. $29.71 Estimated total manufacturing overhead = $1,630,960 + ($7.67 per machine-hour × 74,000 machine-hours) = $2,198,540 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,198,540 ÷ 74,000 machine-hours = $29.71 per machine-hour "
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Hibshman Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 10,000 machine-hours. The estimated variable manufacturing overhead was $6.82 per machine-hour and the estimated total fixed manufacturing overhead was $230,200. The predetermined overhead rate for the recently completed year was closest to:
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"A. $29.84 per machine-hour Estimated total manufacturing overhead = $230,200 + ($6.82 per machine-hour × 10,000 machine-hours) = $298,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $298,400 ÷ 10,000 machine-hours = $29.84 per machine-hour "
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"CR Corporation has the following estimated costs for the next year: CR Corporation estimates that 20,000 labor-hours will be worked during the year. If overhead is applied on the basis of direct labor-hours, the overhead rate per hour will be: "
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"A $2.25 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $45,000 ÷ 20,000 direct labor-hours = $2.25 per direct labor-hour"
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"Jameson Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Jameson estimates that 24,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: "
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"A. $2.00 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $48,000 ÷ 24,000 direct labor-hours = $2.00 per direct labor-hour "
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"Paulson Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Paulson estimated that 40,000 direct labor-hours and 20,000 machine-hours would be worked during the year. The predetermined overhead rate per machine-hour will be: "
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"B. $2.10 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Predetermined overhead rate = $42,000 ÷ 20,000 machine-hours = $2.10 per machine-hour "
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"Aksamit Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: The predetermined overhead rate for the recently completed year was closest to: "
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"B. $31.00 Estimated total manufacturing overhead = $1,486,140 + ($7.03 per machine-hour × 62,000 machine-hours) = $1,922,000 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,922,000 ÷ 62,000 machine-hours = $31.00 per machine-hour "
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Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 70,000 labor-hours. The estimated variable manufacturing overhead was $9.93 per labor-hour and the estimated total fixed manufacturing overhead was $1,649,200. The actual labor-hours for the year turned out to be 74,000 labor-hours. The predetermined overhead rate for the recently completed year was closest to:
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"C. $33.49 Estimated total manufacturing overhead = $1,649,200 + ($9.93 per labor-hour × 70,000 labor-hours) = $2,344,300 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,344,300 ÷ 70,000 labor-hours = $33.49 per labor-hour "
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The Work in Process inventory account of a manufacturing Corporation shows a balance of $18,000 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $6,000 and $3,000 for materials, and charges of $4,000 and $2,000 for direct labor. From this information, it appears that the Corporation is using a predetermined overhead rate, as a percentage of direct labor costs, of:
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"A. 50% ($10,000 + $4,000X) + ($5,000 + $2,000X) = $18,000 $6,000X = $3,000 X = 0.50 "
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C Manufacturing uses job-order costing with a predetermined overhead rate and applies manufacturing overhead to jobs based on direct labor costs. What is the predetermined overhead rate?
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"A. 125% Entry (b) refers to materials from the Raw Materials account. Entry (c) in the Manufacturing Overhead account must Refer To indirect labor because the corresponding entry in the Work In Process account must be for direct labor. Entry (c) could not be for manufacturing overhead because there would be no entry in Work In Process. Therefore, entry (c) must be for direct and indirect labor. The direct labor must be $154,000 and the manufacturing overhead applied is the $192,500 credit entry (e) in the Manufacturing Overhead account. Therefore, Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $192,500 = Predetermined overhead rate × $154,000 Predetermined overhead rate = $192,500 ÷ $154,000 = 1.25"
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" Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was underapplied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been: "
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"D. $238,000 Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied Manufacturing overhead applied = Actual manufacturing overhead - Underapplied manufacturing overhead = $233,000 - $15,400 = $217,600 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Predetermined overhead rate = Overhead applied ÷ Amount of the allocation base incurred Predetermined overhead rate = $217,600 ÷ 16,000 direct labor-hours = $13.60 per direct labor-hour Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Estimated total manufacturing overhead = Predetermined overhead rate × Estimated total amount of the allocation base = $13.60 per direct labor-hour × 17,500 direct labor-hours = $238,000 "
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Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $423,870. At the end of the year, actual direct labor-hours for the year were 19,400 hours, manufacturing overhead for the year was underapplied by $5,650, and the actual manufacturing overhead was $418,870. The predetermined overhead rate for the year must have been closest to:
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"C. $21.30 Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied Manufacturing overhead applied = Actual manufacturing overhead - Underapplied manufacturing overhead = $418,870 - $5,650 = $413,220 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $413,220 ÷ 19,400 direct labor-hours = $21.30 per direct labor-hour "
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Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 57,000 actual direct labor-hours and incurred $345,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 55,000 direct labor-hours during the year and incur $330,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was:
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"D. underapplied by $3,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 55,000 direct labor-hours = $6 per direct labor-hour Overhead over or underapplied "
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Clear Colors Corporation uses a predetermined overhead rate based on direct labor costs to apply manufacturing overhead to jobs. At the beginning of the year the Corporation estimated its total manufacturing overhead cost at $350,000 and its direct labor costs at $200,000. The actual overhead cost incurred during the year was $362,000 and the actual direct labor costs incurred on jobs during the year was $208,000. The manufacturing overhead for the year would be:
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"D. $2,000 overapplied. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $350,000 ÷ $200,000 = 1.75 Overhead over or underapplied "
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Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,900 hours and the total estimated manufacturing overhead was $341,890. At the end of the year, actual direct labor-hours for the year were 16,700 hours and the actual manufacturing overhead for the year was $336,890. Overhead at the end of the year was:
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"C. $17,920 underapplied Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $341,890 ÷ 17,900 direct labor-hours = $19.10 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $19.10 per direct labor-hour × 16,700 direct labor-hours = $318,970 Overhead over or underapplied "
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"Brusveen Corporation applies manufacturing overhead to jobs on the basis of direct labor-hours. The following information relates to Brusveen for last year: What was Brusveen's underapplied or overapplied overhead for last year? "
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"C. $8,880 overapplied Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $300,000 ÷ 15,000 direct labor-hours = $20 per direct labor-hour Overhead over or underapplied "
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"Collins Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information applies to the Corporation for the current year: The manufacturing overhead cost for the current year will be: "
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"B. $17,000 underapplied Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $240,000 ÷ $300,000 = 0.80 Overhead over or underapplied "
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At the beginning of the year, manufacturing overhead for the year was estimated to be $477,590. At the end of the year, actual direct labor-hours for the year were 29,000 hours, the actual manufacturing overhead for the year was $472,590, and manufacturing overhead for the year was overapplied by $110. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:
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"A. 29,300 direct labor-hours Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied -$110 = $472,590 - Overhead applied Manufacturing overhead applied = $472,590 + $110 = $472,700 Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours Predetermined overhead rate = Manufacturing overhead applied ÷ Actual direct labor-hours = $472,700 ÷ 29,000 direct labor-hours = $16.30 per direct labor-hour Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated direct labor-hours Estimated direct labor-hours = Estimated total manufacturing overhead ÷ Predetermined overhead rate = $477,590 ÷ $16.30 per direct labor-hour = 29,300 direct labor-hours "
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Galbraith Corporation applies overhead cost to jobs on the basis of 70
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of direct labor cost. If Job 201 shows $28,000 of manufacturing overhead applied, the direct labor cost on the job was: % "A. $40,000 Manufacturing overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $28,000 = 0.70 × Direct labor cost Direct labor cost = $28,000 ÷ 0.70 = $40,000 "
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"Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 593 would be: "
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A. $6,705
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The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,260. A total of 37 direct labor-hours and 141 machine-hours were worked on the job. The direct labor wage rate is $13 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost for the job on its job cost sheet would be:
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C. $4,715
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"Spectrum Manufacturing had the following information in its records at the end of the year: What was the balance in Manufacturing Overhead, and when closed what will the effect be on gross margin? "
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"B. $3,000 overapplied, and increase Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Overhead applied = 1.25 × $84,000 = $105,000 Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied = $102,000 - $105,000 = -$3,000 The overapplied overhead will decrease Cost of Goods Sold and therefore increase the gross margin. "
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Parsons Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Parsons Corporation incurred $250,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied $12,000 for the year. If the predetermined overhead rate was $8.00 per direct labor-hour, how many hours did the Corporation work during the year?
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"C. 32,750 hours Overapplied manufacturing overhead = Manufacturing overhead applied - Actual manufacturing overhead Manufacturing overhead applied = Actual manufacturing overhead + Overapplied manufacturing overhead = $250,000 + $12,000 = $262,000 Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours Actual direct labor-hours = Manufacturing overhead applied ÷ Predetermined overhead rate = $262,000 ÷ $8.00 per direct labor-hour = 32,750 direct labor-hours "
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During October, Dorinirl Corporation incurred $60,000 of direct labor costs and $5,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:
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D. debit to Work in Process of $60,000
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Soledad Corporation had $36,000 of raw materials on hand on December 1. During the month, the Corporation purchased an additional $71,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
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B. debit to Raw Materials of $71,000
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At the beginning of December, Sneeden Corporation had $32,000 of raw materials on hand. During the month, the Corporation purchased an additional $71,000 of raw materials. During December, $75,000 of raw materials were requisitioned from the storeroom for use in production. The credits entered in the Raw Materials account during the month of December total:
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B. $75,000
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On February 1, Manwill Corporation had $24,000 of raw materials on hand. During the month, the Corporation purchased an additional $60,000 of raw materials. During February, $54,000 of raw materials were requisitioned from the storeroom for use in production. The debits entered in the Raw Materials account during the month of February total:
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C. $60,000
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Donham Corporation had $25,000 of raw materials on hand on May 1. During the month, the Corporation purchased an additional $65,000 of raw materials. During May, $66,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total
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B. $62,000
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During February at Iniquez Corporation, $79,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a:
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B. debit to Work in Process of $75,000
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Epolito Corporation incurred $87,000 of actual Manufacturing Overhead costs during September. During the same period, the Manufacturing Overhead applied to Work in Process was $89,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:
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" C. debit to Manufacturing Overhead of $87,000 "
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Traves Corporation incurred $69,000 of actual Manufacturing Overhead costs during October. During the same period, the Manufacturing Overhead applied to Work in Process was $68,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
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B. credit to Manufacturing Overhead of $68,000
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During October, Beidleman Inc. transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000. The journal entries to record these transactions would include a:
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B. credit to Work in Process of $52,000
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In July, Essinger Inc. incurred $72,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:
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A. debit to Manufacturing Overhead of $3,000
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During May at Shatswell Corporation, $57,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $7,000. The journal entry to record this requisition would include a debit to Manufacturing Overhead of:
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B. $7,000
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Which of the following entries or sets of entries would record sales for the month of July of $200,000 for goods costing $119,000 for?
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D. Option D
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Bretthauer Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $51,000 and the total of the credits to the account was $64,000. Which of the following statements is true?
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B. Manufacturing overhead applied to Work in Process for the month was $64,000.
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Arvay Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $62,000 and the total of the credits to the account was $52,000. Which of the following statements is true?
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"C. Manufacturing overhead for the month was underapplied by $10,000. A debit balance in Manufacturing Overhead means that manufacturing overhead was underapplied"
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Kaleohano Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $62,000 and the total of the credits to the account was $73,000. Which of the following statements is true?
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"D. Actual manufacturing overhead for the month was $62,000. The debits to the Manufacturing Overhead account consist of the actual manufacturing overhead for the month "
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The following accounts are from last year's books of Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of direct materials used for the year?
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"B. $69,000 The journal entry to record Issue of direct and indirect materials was entry (a) above: Direct materials are debited to Work in Process; indirect materials are debited to Manufacturing Overhead. "
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"The following accounts are from last year's books at Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year? "
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"B. $251,000 Cost of goods manufactured is represented by the debit to Finished Goods and the credit to Work in Process (entry f) = $251,000 cost of goods manufactured"
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Compute the amount of raw materials used during August if $25,000 of raw materials were purchased during the month and the inventories were as follows:
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"D. $27,000 Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory Raw materials used in production = $5,000 + $25,000 - $3,000 = $27,000 "
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The following accounts are from last year's books at Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the manufacturing overapplied or underapplied for the year?
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C. $3,000 overapplied The manufacturing overhead is overapplied by $3,000 because the manufacturing overhead applied of $100,000 exceeds the manufacturing overhead incurred by $3,000.
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Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $39,000 and at the end of the month was $47,000. The cost of goods manufactured for the month was $188,000. The actual manufacturing overhead cost incurred was $71,000 and the manufacturing overhead cost applied to Work in Process was $67,000. The adjusted cost of goods sold that would appear on the income statement for July is:
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"B. $184,000 Manufacturing overhead underapplied (overapplied) = Actual manufacturing overhead incurred - Manufacturing overhead applied = $71,000 - $67,000 = $4,000 underapplied Adjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory + Manufacturing overhead underapplied = $39,000 + $188,000 - $47,000 + $4,000 = $184,000 "
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Hudek Inc., a manufacturing Corporation, has provided the following data for the month of July. The balance in the Work in Process inventory account was $20,000 at the beginning of the month and $10,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $50,000 and direct labor cost of $22,000. The actual manufacturing overhead cost incurred was $58,000. The manufacturing overhead cost applied to Work in Process was $56,000. The cost of goods manufactured for July was:
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"A. $138,000 Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory - Ending work in process inventory = $50,000 + $22,000 + $56,000 + $20,000 - $10,000 = $138,000 "
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Stelmack Corporation, a manufacturing Corporation, has provided data concerning its operations for September. The beginning balance in the raw materials account was $20,000 and the ending balance was $27,000. Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred during the month was $53,000, of which $3,000 consisted of raw materials classified as indirect materials. The direct materials cost for September was:
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"B. $53,000 Direct materials cost = Beginning raw materials inventory + Raw materials purchases - Ending raw materials - Indirect materials = $20,000 + 63,000 - $27,000 - $3,000 = $53,000 "
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"Franchi Inc. has provided the following data for the month of April. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $5,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The cost of goods sold for April after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
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"C. $205,330 Cost of goods sold after allocation of underapplied overhead = $209,380 + [($56,700/$70,000) × -$5,000] = $209,380 + (81% × -$5,000) = $205,330"
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"Kubinski Inc. has provided the following data for the month of September. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $2,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for September would include the following: "
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"D. credit to Finished Goods of $300 Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. "
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"Smallwood Corporation has provided the following data concerning manufacturing overhead for January: The Corporation's Cost of Goods Sold was $223,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true? "
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"C. Manufacturing overhead for the month was underapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $228,000 Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead - Overapplied manufacturing overhead = $223,000 + $5,000 - $0 = $228,000"
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"Zelinsky Inc. has provided the following data for the month of April. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $2,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for April would include the following: "
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"C. debit to Cost of Goods Sold of $1,440 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts."
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"Karpel Inc. has provided the following data for the month of April. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $4,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The finished goods inventory at the end of April after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
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"B. $45,240 Ending finished goods inventory after allocation of overapplied manufacturing overhead = $44,640 + [($10,200/$68,000) × $4,000] = $44,640 + (15% × $4,000) = $45,240"
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"Warila Inc. has provided the following data for the month of September. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $3,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The work in process inventory at the end of September after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
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"D. $23,550 Ending work in process inventory after allocation of underapplied manufacturing overhead = $23,310 + [($4,720/$59,000) × $3,000] = $23,310 + (8% × $3,000) = $23,550 "
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"Longstaff Inc. has provided the following data for the month of March. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $5,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for March would include the following: "
answer
"D. credit to Work in Process of $500 Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. "
question
The actual manufacturing overhead incurred at Fraze Corporation during November was $79,000, while the manufacturing overhead applied to Work in Process was $65,000. The Corporation's Cost of Goods Sold was $385,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?
answer
A. Manufacturing overhead for the month was underapplied by $14,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $399,000. Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead - Overapplied manufacturing overhead = $385,000 + $14,000 - $0 = $399,000
question
Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The predetermined overhead rate was based on how many estimated machine-hours
answer
"B. 6,000 80. Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total machine-hours Estimated total machine-hours = Estimated total manufacturing overhead ÷ Predetermined overhead rate = $60,600 ÷ $10.10 per machine-hour = 6,000 machine-hours "
question
Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The applied manufacturing overhead for the year was closest to:
answer
"B. $59,590 Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $10.10 per machine-hour × 5,900 machine-hours = $59,590 "
question
Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The overhead for the year was:
answer
"B. $590 overapplied Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $10.10 per machine-hour × 5,900 machine-hours = $59,590 "
question
Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $210,600 and 6,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $209,000 and actual direct labor-hours were 5,980. The predetermined overhead rate for the year was closest to:
answer
"D. $35.10 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total direct labor-hours = $210,600 ÷ 6,000 direct labor-hours = $35.10 per direct labor-hour "
question
Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $210,600 and 6,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $209,000 and actual direct labor-hours were 5,980. The applied manufacturing overhead for the year was closest to:
answer
"C. $209,898 Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $35.10 per direct labor-hour × 5,980 direct labor-hours = $209,898 "
question
Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $210,600 and 6,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $209,000 and actual direct labor-hours were 5,980. The overhead for the year was:
answer
D. $898 overapplied
question
"Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The predetermined overhead rate is closest to: "
answer
"A. $36.60 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $139,080 ÷ 3,800 machine-hours = $36.60 per machine-hour "
question
The applied manufacturing overhead for the year is closest to:
answer
"B. $138,348 Manufacturing overhead applied = Predetermined overhead rate × Actual amount of the allocation base = $36.60 per machine-hour × 3,780 machine-hours = $138,348 "
question
The overhead for the year was
answer
D. $1,348 overapplied
question
"Meyers Corporation had the following inventory balances at the beginning and end of November: During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labor-hour, and it paid its direct labor workers $10 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Corporation incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. The raw materials purchased during November totaled: "
answer
"A. $42,000 Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory $39,000 = $17,000 + Purchases of raw materials - $20,000 Purchases of raw materials = $39,000 - $17,000 + $20,000 = $42,000 "
question
The direct materials cost in the November 1 Work in Process inventory account totaled:
answer
"C. $3,600 Beginning work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process Direct material = Beginning work in process inventory - Direct labor - Manufacturing overhead applied to work in process Direct material = $9,000 - ($10 per direct labor-hour × 300 direct labor-hours) - ($8 per direct labor-hour × 300 direct labor-hours) Direct material = $9,000 - $3,000 - $2,400 = $3,600 "
question
The actual direct labor-hours worked during November totaled:
answer
"B. 3,300 hours Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Amount of the allocation base incurred = Overhead applied ÷ Predetermined overhead rate Amount of the allocation base incurred = $26,400 ÷ $8 per direct labor-hour = 3,300 direct labor-hours "
question
The amount of direct labor cost in the November 30 Work in Process inventory was:
answer
"C. $3,500 Ending work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process $11,000 = $4,700 + $10X + $8X $18X = $11,000 - $4,700 = $6,300 X = 350 Direct labor cost = $10 × 350 = $3,500 "
question
The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. The balance in the Work in Process inventory account on May 1 was
answer
"D. $8,500 Beginning balance work in process inventory = Direct Materials + Direct labor + Manufacturing overhead applied Beginning balance work in process inventory = $4,000 + ($9.00 per direct labor-hour × 300 direct labor-hours) + ($6.00 per direct labor-hour × 300 direct labor-hours) = $4,000 + $2,700 + $1,800 = $8,500 "
question
The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. The debit to Work in Process for the cost of direct materials used during May was:
answer
"A. $63,000 Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory Raw materials used in production = Purchases of raw materials + (Beginning raw materials inventory - Ending raw materials inventory) Raw materials used in production = $60,000 + $3,000 = $63,000 "
question
The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. The debit to Work in Process for direct labor cost during May was:
answer
C. $28,800
question
The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. If overhead was underapplied by $2,500 during May, the actual overhead cost for the month must have been:
answer
"B. $21,700 Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied $2,500 = Actual manufacturing overhead - ($6.00 per direct labor-hour × 3,200 direct labor-hours) Actual manufacturing overhead = $2,500 + ($6.00 per direct labor-hour × 3,200 direct labor-hours) = $2,500 + $19,200 = $21,700 "
question
The direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. The direct materials used in production during the year totaled:
answer
"A. $180,000 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Overhead applied = $6.00 per direct labor-hour × 20,000 direct labor-hours = $120,000 $550,000 = $0 + Direct Materials + $250,000 + $120,000 Direct Materials = $550,000 - ($0 + $250,000 + $120,000) = $180,000 "
question
If the actual manufacturing overhead cost for the year totaled $145,000, then overhead was:
answer
"C. underapplied by $25,000 Overhead over or underapplied"
question
The Corporation's ending work in process inventory consisted of one job, Job 42. The job had been charged with $28,000 of direct labor cost, which consisted of 2,000 actual labor-hours. The direct materials cost in Job 42 totaled:
answer
"D. $30,000 Computation of ending work in process inventory: Ending work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied $70,000 = Direct materials + $28,000 + ($6.00 per direct labor-hour × 2,000 actual labor-hours) $70,000 = Direct materials + $28,000 + $12,000 Direct materials = $70,000 - ($28,000 + $12,000) = $30,000 "
question
On March 1, Metevier Corporation had $37,000 of raw materials on hand. During the month, the company purchased an additional $62,000 of raw materials. During March, $69,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the purchase of raw materials would include a:
answer
D. debit to Raw Materials of $62,000
question
On March 1, Metevier Corporation had $37,000 of raw materials on hand. During the month, the company purchased an additional $62,000 of raw materials. During March, $69,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a:
answer
B. debit to Work in Process of $63,000
question
Chelm Music Corporation manufactures violins, violas, cellos, and fiddles and uses a job-order costing system. What account should Chelm debit when the workers who carve the wood for the instruments have earned their pay?
answer
B. Work in Process
question
What account should Chelm debit when the production manager has earned her salary?
answer
C. Manufacturing Overhead
question
What account should Chelm debit when the president of the company has earned her salary
answer
E. Salaries and Wages Expense
question
What is one of the accounts that Chelm should credit when goods are sold?
answer
A. Finished Goods
question
During February, Irving Corporation incurred $65,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $60,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:
answer
A. debit to Manufacturing Overhead of $65,000
question
During February, Irving Corporation incurred $65,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $60,000. TThe journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
answer
C. credit to Manufacturing Overhead of $60,000
question
On August 1, Shead Corporation had $35,000 of raw materials on hand. During the month, the company purchased an additional $56,000 of raw materials. During August, $69,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The debits entered in the Raw Materials account during the month of August total:
answer
D. $56,000
question
The credits to the Raw Materials account for the month of August total:
answer
D. $69,000
question
The debits to the Work in Process account as a consequence of the raw materials transactions in August total:
answer
C. $63,000
question
The credits to the Work in Process account as a consequence of the raw materials transactions in August total:
answer
"C. $0 There were no credits to the Work in Process account in August, only debits."
question
The debits to the Manufacturing Overhead account as a consequence of the raw materials transactions in August total:
answer
A. $6,000
question
The credits to the Manufacturing Overhead account as a consequence of the raw materials transactions in August total:
answer
"A. $0 There were no credits to the Manufacturing overhead account in August, only debits."
question
Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75
answer
of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company: The balance on May 1 in the Raw Materials inventory account was: % "B. 5,000 $8,000 = X + $38,000 - $35,000 X = $8,000 - ($38,000 - $35,000) = $5,000 "
question
The amount of direct materials cost in the May 31 Work in Process inventory account was
answer
"D. $4,300 Ending work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied $12,000 = Direct materials + $4,400 + (0.75 × $4,400) Direct materials = $12,000 - $4,400 - (0.75 × $4,400) = $4,300 "
question
The entry to dispose of the under or overapplied manufacturing overhead cost for the month would include:
answer
"C. a debit of $2,000 to Cost of Goods Sold. Closing out balance in Manufacturing Overhead to COGS: Underapplied overhead: "
question
The Cost of Goods Manufactured for May was:
answer
"A. $84,500 Cost of Goods Manufactured"
question
Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600. At the end of the year, manufacturing overhead was overapplied by $15,900. The balance in the Finished Goods inventory account at the beginning of the year was:
answer
"B. $15,400 Ending finished goods inventory = Beginning finished goods inventory + Debits - Credits $36,600 = Beginning finished goods inventory + $360,000 - $338,800 Beginning finished goods inventory = $36,600 - $360,000 + $338,800 = $15,400 "
question
If the applied manufacturing overhead was $169,300, the actual manufacturing overhead cost for the year was:
answer
"B. $153,400 Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied -$15,900 = Actual manufacturing overhead - $169,300 Actual manufacturing overhead = $169,300 - $15,900 = $153,400 "
question
The following partially completed T-accounts summarize transactions for Farwest Corporation during the year: The Cost of Goods Manufactured was:
answer
B. $26,300
question
The direct labor cost was:
answer
"A. $8,000 The key is to recognize that the 7,400 debit entry in the Work in Process account represents direct materials. The journal entry would have been: The other debit entry in the Work in Process account in the amount of $6,800 is manufacturing overhead applied because there is a corresponding credit entry for the same amount in the account Manufacturing Overhead. "
question
The direct materials cost was:
answer
"C. $7,400 The key is to recognize that the 7,400 debit entry in the Work in Process account represents direct materials. The journal entry would have been: The direct materials is the $7,400 debit to Work in Process. "
question
The manufacturing overhead applied was:
answer
"B. $6,800 The manufacturing overhead applied is the credit entry of $6,800 in the Manufacturing Overhead account."
question
The manufacturing overhead was:
answer
B. $700 underapplied
question
"Dapper Corporation had only one job in process on May 1. The job had been charged with $3,400 of direct materials, $4,640 of direct labor, and $9,200 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.00 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $7,540 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The balance in the raw materials inventory account on May 30 was: "
answer
"B. $2,000 Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory Ending raw materials inventory = Beginning raw materials inventory + Purchases of raw materials - Raw materials used in production Ending raw materials inventory = $8,500 + $42,000 - $48,500 = $2,000 "
question
"Dapper Corporation had only one job in process on May 1. The job had been charged with $3,400 of direct materials, $4,640 of direct labor, and $9,200 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.00 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $7,540 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was: "
answer
"A. $109,670 Beginning work in process inventory = $3,400 + $4,640 + $9,200 = $17,240"
question
The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a:
answer
D. credit of $2,200 to Manufacturing Overhead.
question
Messana Corporation reported the following data for the month of August: The direct materials cost for August is:
answer
A. $73,000
question
The cost of goods manufactured for August is:
answer
B. $229,000
question
The adjusted cost of goods sold that appears on the income statement for August is:
answer
C. $209,000 overapplied
question
Tondre Inc. has provided the following data for the month of July: The cost of goods manufactured for July is:
answer
A. $210,000
question
The adjusted cost of goods sold that appears on the income statement for July is:
answer
B. $198,000 Overapplied
question
"Huckabee Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $2,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The work in process inventory at the end of November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"C. $12,280 Allocating underapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Work in process inventory at the end of November after allocation of overapplied manufacturing overhead = $12,000 + [($3,220/$23,000) × $2,000] = $12,000 + (14% × $2,000) = $12,280 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following:
answer
"C. debit to Cost of Goods Sold of $1,100 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts."
question
"Petters Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $10,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The work in process inventory at the end of November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"A. $6,520 Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Work in process inventory at the end of November after allocation of overapplied manufacturing overhead = $6,720 + [($2,180/$109,000) × -$10,000] = $6,720 + (2% × -$10,000) = $6,520 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following:
answer
"D. credit to Finished Goods of $1,200 Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts "
question
"The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following: Knobel Inc. has provided the following data for the month of September. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $7,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The finished goods inventory at the end of September after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"B. $35,190 Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts. Finished goods inventory at the end of September after allocation of underapplied manufacturing overhead = $36,170 + [($9,940/$71,000) × -$7,000] = $36,170 + (14% × -$7,000) = $35,190 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for September would include the following:
answer
"C. credit to Cost of Goods Sold of $5,670 Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts."
question
"Mckeighan Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $3,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The finished goods inventory at the end of November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"B. $53,870 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts. Finished goods inventory at the end of November after allocation of underapplied manufacturing overhead = $53,360 + [($11,220/$66,000) × $3,000] = $53,360 + (17% × $3,000) = $53,870 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following:
answer
"C. debit to Work in Process of $180 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts."
question
"Komorowski Inc. has provided the following data for the month of July. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $3,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The cost of goods sold for July after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"C. $107,020 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts. Cost of goods sold for July after allocation of underapplied manufacturing overhead = $104,950 + [($24,150/$35,000) × $3,000] = $104,950 + (69% × $3,000) = $107,020 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for July would include the following:
answer
"C. debit to Finished Goods of $600 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts."
question
"Sirmans Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $4,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The cost of goods sold for August after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: "
answer
"A. $75,180 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts. Cost of goods sold for August after allocation of overapplied manufacturing overhead = $73,140 + [($15,810/$31,000) × $4,000] = $73,140 + (51% × $4,000) = $75,180 "
question
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for August would include the following:
answer
"B. debit to Work in Process of $400 Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts."
question
The predetermined overhead rate under the traditional costing system is closest to:
answer
"A. $103.88 Direct labor-hour calculation: Predetermined overhead rate = Total estimated overhead ÷ Total estimated direct labor-hours = $67,522 ÷ 650 direct labor-hours = $103.88 per direct labor-hour "
question
The overhead cost per unit of Product A under the traditional costing system is closest to:
answer
"D. $41.55 Direct labor-hour calculation: Predetermined overhead rate = Total estimated overhead ÷ Total estimated direct labor-hours = $67,522 ÷ 650 direct labor-hours = $103.88 per direct labor-hour Overhead cost per unit of A = $103.88 per direct labor-hour × 0.4 direct labor-hours per unit = $41.55 per unit "
question
The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to:
answer
"B. $13.83 Activity rate for Activity 1 = $6,915 ÷ 500 = $13.83"
question
The overhead cost per unit of Product A under the activity-based costing system is closest to
answer
"A. $67.66 Overhead cost per unit of Product A = $33,832 ÷ 500 units = $67.66 per unit"
question
The manufacturing overhead that would be applied to a unit of product R58G under the company's traditional costing system is closest to:
answer
"A. $6.74 Predetermined overhead rate = $1,617,600 ÷ 24,000 direct labor-hours = $67.40 per direct labor-hour Overhead applied to a unit of product T37C = $67.40 per direct labor-hours × 0.10 direct labor-hours per unit = $6.74 per unit "
question
The manufacturing overhead that would be applied to a unit of product R09O under the activity-based costing system is closest to:
answer
"A. $113.46 Manufacturing overhead applied to a unit of product R09O = $1,134,600 ÷ 10,000 units = $113.46 per unit"
question
if manufacturing overhead is underapplied
answer
the cost of goods sold would increase by $5,700 and the gross margin would decrease by $5,700.
