Question 1

During 2010, Arb Company incurred the following direct labor costs: January $15,000 and February $30,000. Arb uses a predetermined overhead rate of 120% of direct labor cost. Estimated overhead for the 2 months, respectively, totaled $19,500 and $35,700. Actual overhead for the 2 months, respectively, totaled $18,400 and $32,500.
Instructions
Determine if overhead is over- or underapplied for each of the two months and the respective amounts.

Accepted Answer

The answer of During 2010, Arb Company incurred the following...

Question 2

The manufacturing operations of Bryant, Inc. had the following balances for the month of January:  
Bryant transferred $250,000 of completed goods out of work in process during January.
Instructions
Compute the cost of goods sold.

Accepted Answer

The answer of The manufacturing operations of Bryant, Inc. had...

Question 3

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

Accepted Answer

Raw Materials Inventory is the account to be debited when purchasing raw materials in a job order cost system. This is because raw materials are purchased and stored in inventory until they are used in production.

Question 4

Usually, under- or overapplied overhead is considered to be an adjustment to

Accepted Answer

The answer of Usually, under- or overapplied overhead is considered...

Question 5

Builder Bug Company allocates overhead at $9 per direct labor hour. Job A45 required 4 boxes of direct materials at a cost of $30 per box and took employees 10 hours to complete. Employees earn $15 per hour.
Instructions
Compute the total cost of Job A45.

Accepted Answer

The answer of Builder Bug Company allocates overhead at $9...

Question 6

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8,000.  
Instructions
Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Accepted Answer

The answer of The following amounts were reported by Burke...

Question 7

Overapplied manufacturing overhead exists when overhead assigned to work in process is

Accepted Answer

Overapplied manufacturing overhead occurs when the overhead assigned to work in process exceeds the actual overhead incurred, resulting in a credit balance in the Manufacturing Overhead account at the end of the period.

Question 8

Colby Company estimates that annual manufacturing overhead costs will be $800,000. Estimated annual operating activity bases are: direct labor cost $460,000, direct labor hours 40,000 and machine hours 80,000. The actual manufacturing overhead cost for the year was $801,000 and the actual direct labor cost for the year was $456,000. Actual direct labor hours totaled 40,200 and machine hours totaled 79,000. Colby applies overhead based on direct labor hours.
Instructions
Compute the predetermined overhead rate and determine the amount of manufacturing overhead applied. Determine if overhead is over- or underapplied and the amount.

Accepted Answer

The answer of Colby Company estimates that annual manufacturing overhead...

Question 9

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Accepted Answer

The answer of When the company assigns factory labor costs...

Question 10

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Accepted Answer

After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, the balance in the Manufacturing Overhead account will be zero. Therefore, statement A is the correct one among the options provided. Statement B is incorrect because when Manufacturing Overhead has a credit balance, overhead is said to be overapplied. Statement C is partially correct because under- or overapplied overhead is indeed eliminated by a closing entry, but it is not the only entry made for this purpose. Lastly, statement D is incorrect because overapplied overhead is reported as a current asset on the balance sheet, not a current liability.

Question 11

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows:  
Instructions
Compute the predetermined overhead rate.

Accepted Answer

The answer of Martin Company applies manufacturing overhead based on...

Question 12

Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $90,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

Accepted Answer

Direct labor cost = (Manufacturing overhead / 200%) = $120,000 / 2 = $60,000
Total manufacturing cost = Direct materials cost + Direct labor cost + Manufacturing overhead
= $90,000 + $60,000 + $120,000
= $270,000.

Therefore, choice C is correct.

Question 13

In January, Harlan, Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $600, Job 2 $900, Job 3 $300, and general factory use, $520.
Instructions
Prepare a summary journal entry to record raw materials used.

Accepted Answer

The answer of In January, Harlan, Inc. production supervisor requisitioned...

Question 14

During the first year of operations, Shapiro Tool accumulated the following manufacturing costs:  
Instructions
Prepare separate journal entries for each manufacturing cost.

Accepted Answer

The answer of During the first year of operations, Shapiro...

Question 15

In a manufacturing company, the cost of factory labor consists of all of the following except

Accepted Answer

The cost of factory labor includes gross earnings of factory workers, employer payroll taxes, and fringe benefits incurred by the employer. However, it does not include the net earnings of factory workers, as this refers to the amount the workers take home after deductions and taxes have been taken out of their paychecks.

Question 16

A process cost system would be used for all of the following except the

Accepted Answer

A process cost system is used for homogeneous products that go through multiple steps of production, where it is difficult to distinguish the cost of each individual unit. The manufacture of cereal, refining of petroleum, and production of automobiles all fit this description. However, the printing of wedding invitations is typically a job order cost system, where each order is unique and requires specific materials and labor, making it unsuitable for a process cost system.

Question 17

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Accepted Answer

Manufacturing overhead is assigned to work in progress on a predetermined overhead rate. This rate is estimated before the beginning of the production process and is based on the company's estimate of the total amount of overhead costs and the estimated level of activity. The predetermined overhead rate is used to allocate overhead costs to individual products, jobs or services.

Question 18

Which of the following is not a control account?

Accepted Answer

The answer of Which of the following is not a...

Question 19

At December 31, Ding Company reported the following balances in its accounts:  
The company's balance in its Manufacturing Overhead account at the same date was a debit of $4,400.
Instructions
Prepare the entry to adjust the over- or underapplied overhead amount at December 31.

Accepted Answer

The answer of At December 31, Ding Company reported the...

Question 20

Lando Company reported the following amounts for 2010:
Raw materials purchased $98,000 Ending work in process inventory $ 6,300
Beginning raw materials inventory 5,200 Manufacturing overhead costs applied 36,000
Ending raw materials inventory 4,500 Beginning work in process inventory 6,100
Instructions
Calculate the cost of materials used in production

Accepted Answer

The answer of Lando Company reported the following amounts for...

Quiz 20: Job Order Costing

The manufacturing operations of Bryant, Inc. had the following balances for the month of January: Bryant transferred $250,000 of completed goods out of work in process during January. Instructions Compute the cost of goods sold.

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

Usually, under- or overapplied overhead is considered to be an adjustment to

Builder Bug Company allocates overhead at $9 per direct labor hour. Job A45 required 4 boxes of direct materials at a cost of $30 per box and took employees 10 hours to complete. Employees earn $15 per hour. Instructions Compute the total cost of Job A45.

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8,000. Instructions Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Overapplied manufacturing overhead exists when overhead assigned to work in process is

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: Instructions Compute the predetermined overhead rate.

Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $90,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

In January, Harlan, Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $600, Job 2 $900, Job 3 $300, and general factory use, $520. Instructions Prepare a summary journal entry to record raw materials used.

During the first year of operations, Shapiro Tool accumulated the following manufacturing costs: Instructions Prepare separate journal entries for each manufacturing cost.

In a manufacturing company, the cost of factory labor consists of all of the following except

A process cost system would be used for all of the following except the

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Which of the following is not a control account?

At December 31, Ding Company reported the following balances in its accounts: The company's balance in its Manufacturing Overhead account at the same date was a debit of $4,400. Instructions Prepare the entry to adjust the over- or underapplied overhead amount at December 31.