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Exam 2: Job-Order Costing

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Question 71

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Dydell Inc.has provided the following data for the month of December.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 December after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

A) $27,498
B) $30,220
C) $30,282
D) $27,560

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Question 72

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Glen Lake Corporation recorded the following transactions for the just completed month: a.$60,000 in raw materials were purchased on account. b.$51,000 in raw materials were requisitioned for use in production.Of this amount,$42,000 was for direct materials and the remainder was for indirect materials. c.Total labor wages of $92,000 were incurred and paid.Of this amount,$81,000 was for direct labor and the remainder was for indirect labor. d.Additional manufacturing overhead cost of $155,000 were incurred.All were on account. Required: Record the above transactions in journal entries.

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Question 73

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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 actual manufacturing overhead cost of the job.

Desrevisseau Inc. ,a manufacturing company,has provided the following data for the month of August.The balance in the Work in Process inventory account was $10,000 at the beginning of the month and $22,000 at the end of the month.During the month,the company incurred direct materials cost of $63,000 and direct labor cost of $39,000.The actual manufacturing overhead cost incurred was $40,000.The manufacturing overhead cost applied to Work in Process was $43,000.The cost of goods manufactured for August was:

On April 1, Bogdon Corporation had $30,000 of raw materials on hand. During the month, the company purchased an additional $63,000 of raw materials. During April, $76,000 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 $2,000. -The journal entry to record the purchase of raw materials would include a:

Job 599 was recently completed.The following data have been recorded on its job cost sheet: The company applies manufacturing overhead on the basis of direct labor-hours.The predetermined overhead rate is $20 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves?

Carter 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 $135,850. Actual manufacturing overhead for the year amounted to $145,000 and actual machine-hours were 5,660. The company's predetermined overhead rate for the year was $24.70 per machine-hour. -The predetermined overhead rate was based on how many estimated machine-hours?

At the beginning of August,Hogancamp Corporation had $26,000 of raw materials on hand.During the month,the company purchased an additional $73,000 of raw materials.During August,$77,000 of raw materials were requisitioned from the storeroom for use in production.The credits to the Raw Materials account for the month of August total:

Goodenough Inc.has provided the following data for August: Required: Prepare T-accounts for Raw Materials,Work in Process,Finished Goods,and Manufacturing Overhead,and Cost of Goods Sold.Record the beginning balances and each of the transactions listed above.Finally,determine the ending balances.

Babb Company is a manufacturing firm that uses job-order costing.The company's inventory balances were as follows at the beginning and end of the year: $\begin{array}{lcc}&\text { Beginning Balance } & \text { Ending Balance } \\\text { Raw materials. }&\$ 11,000 & \$ 15,000 \\\text { Work in process }&\$ 32,000 & \$ 14,000 \\\text { Finished goods }&\$ 108,000 & \$ 123,000\end{array}$ The company applies overhead to jobs using a predetermined overhead rate based on machine-hours.At the beginning of the year,the company estimated that it would work 17,000 machine-hours and incur $272,000 in manufacturing overhead cost.The following transactions were recorded for the year: $\bullet$ Raw materials were purchased,$416,000. $\bullet$ Raw materials were requisitioned for use in production,$412,000 $(376,000 direct and $36,000 indirect). $\bullet$ The following employee costs were incurred: direct labor,$330,000;indirect labor,$69,000;and administrative salaries,$157,000. $\bullet$ Selling costs,$113,000. $\bullet$ Factory utility costs,$29,000. $\bullet$ Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling,general,and administrative activities. $\bullet$ Manufacturing overhead was applied to jobs.The actual level of activity for the year was 15,000 machine-hours. $\bullet$ Sales for the year totaled $1,282,000. Required: a.Prepare a schedule of cost of goods manufactured in good form. b.Was the overhead underapplied or overapplied? By how much? c.Prepare an income statement for the year in good form.The company closes any underapplied or overapplied manufacturing overhead to Cost of Goods Sold.

On April 1, Bogdon Corporation had $30,000 of raw materials on hand. During the month, the company purchased an additional $63,000 of raw materials. During April, $76,000 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 $2,000. -The journal entry to record the requisition from the storeroom would include a:

Alvardo 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 $6,000. 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. Required: Determine the cost of work in process,finished goods,and cost of goods sold AFTER allocation of the underapplied or overapplied manufacturing overhead for the period.

Staniszewski 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 $1,000. 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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for March would include the following:

Top management salaries should not go into the Manufacturing Overhead account.

Lund Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company: -The Cost of Goods Manufactured for March was:

Kelsh Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.The company has provided the following estimated costs for next year: Kelsh estimates that 5,000 direct labor-hours and 10,000 machine-hours will be worked during the year.The predetermined overhead rate per hour will be:

On April 1, Stelter Corporation had $34,000 of raw materials on hand. During the month, the company purchased an additional $60,000 of raw materials. During April, $70,000 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. Prepare journal entries to record these events. Use these journal entries to answer the following questions: -The credits to the Raw Materials account for the month of April total:

Carter 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 $135,850. Actual manufacturing overhead for the year amounted to $145,000 and actual machine-hours were 5,660. The company's predetermined overhead rate for the year was $24.70 per machine-hour. -The overhead for the year was:

Dowan Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.Last year Dowan Company incurred $156,600 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that manufacturing overhead was underapplied by $12,600 for the year.If the predetermined overhead rate is $6.00 per direct labor-hour,how many hours did the company work during the year?