Question 1

The actual manufacturing overhead incurred at Hogans Corporation during April was $59,000,while the manufacturing overhead applied to Work in Process was $74,000.The company's Cost of Goods Sold was $289,000 prior to closing out its Manufacturing Overhead account.The company closes out its Manufacturing Overhead account to Cost of Goods Sold.Which of the following statements is true?

Accepted Answer

Manufacturing overhead was overapplied by $15,000 because the applied overhead ($74,000) was greater than the actual overhead ($59,000). To close out the overapplied overhead, Cost of Goods Sold is reduced by $15,000, resulting in a new Cost of Goods Sold of $274,000.

Question 2

Botton 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 underapplied 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 cost of goods sold for March after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

Accepted Answer

Cost of goods sold after allocation of underapplied overhead = $170,490 + [($41,340/$53,000)F1F1F1S1F1F1F10 $7,000] = $170,490 + (78% F1F1F1S1F1F1F10 $7,000)= $175,950

Question 3

Lyster 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 $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 work in process inventory at the end of August after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

Accepted Answer

Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts.
Ending work in process inventory after allocation of underapplied manufacturing overhead = $5,610 + [($1,520/$38,000)F1F1F1S1F1F1F10 $1,000] = $5,610 + (4% F1F1F1S1F1F1F10 $1,000)= $5,650

Question 4

Caryl 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 underapplied 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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for March would include the following:

Accepted Answer

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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Question 5

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?

Accepted Answer

Cost of goods manufactured is represented by the debit to Finished Goods and the credit to Work in Process (entry f)= $255,000 cost of goods manufactured

Question 6

Delhoyo Corporation,a manufacturing company,has provided data concerning its operations for September.The beginning balance in the raw materials account was $37,000 and the ending balance was $29,000.Raw materials purchased during the month totaled $57,000.Manufacturing overhead cost incurred during the month was $102,000,of which $2,000 consisted of raw materials classified as indirect materials.The direct materials cost for September was:

Accepted Answer

Direct materials cost = Beginning raw materials inventory + Raw materials purchases - Ending raw materials - Indirect materials
= $37,000 + 57,000 - $29,000 - $2,000
= $63,000

Question 7

Graeser Inc.has provided the following data for the month of May.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 $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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for May would include the following:

Accepted Answer

Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts,resulting in credits to those accounts.
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Question 8

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:

Accepted Answer

Ending finished goods inventory after allocation of overapplied manufacturing overhead = $28,890 + [($6,840/$36,000)F1F1F1S1F1F1F10 -$7,000] = $28,890 + (19% F1F1F1S1F1F1F10 -$7,000)= $27,560

Question 9

Jurper Corporation used $150,000 of direct materials during April.At the end of April,Jurper's direct materials inventory was $25,000 more than it was at the beginning of the month.Direct materials purchases during the April amounted to:

Accepted Answer

Beginning materials inventory + Direct materials purchases = Ending materials inventory + Direct materials used
Direct material purchases = Direct materials used + Increase in materials inventory
= $150,000 + $25,000
= $175,000

Question 10

Pinnini Co.uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.Last year,Pinnini Company incurred $225,000 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that overhead was overapplied $14,500 for the year.If the predetermined overhead rate was $5.00 per direct labor-hour,how many hours did the company work during the year?

Accepted Answer

Overapplied manufacturing overhead= Manufacturing overhead applied - Actual manufacturing overhead
Manufacturing overhead applied = Actual manufacturing overhead + Overapplied manufacturing overhead
= $225,000 + $14,500
= $239,500
Manufacturing overhead applied = Predetermined overhead rate F1F1F1S1F1F1F10 Actual direct labor-hours
Actual direct labor-hours = Manufacturing overhead applied F1F1F1S1F1F1F10 Predetermined overhead rate
= $239,500 F1F1F1S1F1F1F10 $5.00 per direct labor-hour
= 47,900 direct labor-hours

Question 11

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?

Accepted Answer

Underapplied manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied
Manufacturing overhead applied = Actual manufacturing overhead - Underapplied manufacturing overhead
= $156,600 - $12,600
= $144,000
Manufacturing overhead applied = Predetermined overhead rate F1F1F1S1F1F1F10 Actual direct labor-hours
Actual direct labor-hours = Manufacturing overhead applied F1F1F1S1F1F1F10 Predetermined overhead rate
= $144,000 F1F1F1S1F1F1F10 $6.00 per direct labor-hour
= 24,000 direct labor-hours

Question 12

Kelson Company applies overhead to jobs on the basis of 60% of direct labor cost.If Job 201 shows $27,000 of manufacturing overhead applied,the direct labor cost on the job was:

Accepted Answer

Manufacturing overhead applied = Predetermined overhead rate F1F1F1S1F1F1F10 Actual direct labor cost
Actual direct labor cost = Manufacturing overhead applied F1F1F1S1F1F1F10 Predetermined overhead rate
= $27,000 F1F1F1S1F1F1F10 0.60
= $45,000

Question 13

Lietz Corporation has provided the following data concerning manufacturing overhead for January:  The company's Cost of Goods Sold was $369,000 prior to closing out its Manufacturing Overhead account.The company closes out its Manufacturing Overhead account to Cost of Goods Sold.Which of the following statements is true?

Accepted Answer

The answer of Lietz Corporation has provided the following data...

Question 14

Minturn 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 $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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for September would include the following:

Accepted Answer

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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Question 15

Under Lamprey Company's job-order costing system,manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate.During January,Lamprey's transactions included the following:  Lamprey Company had no beginning or ending inventories.What was the cost of goods manufactured for January?

Accepted Answer

Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory- Ending work in process inventory
= $90,000 + $107,000 + $113,000 + $0 - $0
= $310,000

Question 16

Bakker 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 $77,250 and 2,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $79,000 and actual direct labor-hours were 2,400.
-The predetermined overhead rate for the year was closest to:

Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead F1F1F1S1F1F1F10 Estimated total direct labor-hours
= $77,250 F1F1F1S1F1F1F10 2,500 direct labor-hours
= $30.90 per direct labor-hour

Question 17

Gest Inc.has provided the following data for the month of November.The balance in the Finished Goods inventory account at the beginning of the month was $49,000 and at the end of the month was $45,000.The cost of goods manufactured for the month was $226,000.The actual manufacturing overhead cost incurred was $74,000 and the manufacturing overhead cost applied to Work in Process was $70,000.The adjusted cost of goods sold that would appear on the income statement for November is:

Accepted Answer

Manufacturing overhead underapplied (overapplied)= Actual manufacturing overhead incurred - Manufacturing overhead applied = $74,000 - $70,000 = $4,000 underapplied
Adjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory + Manufacturing overhead underapplied
= $49,000 + $226,000 - $45,000 + $4,000
= $234,000

Question 18

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:

Accepted Answer

Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory- Ending work in process inventory
= $63,000 + $39,000 + $43,000 + $10,000 - $22,000
= $133,000

Question 19

Sharp Company's records show that overhead was overapplied by $10,000 last year.This overapplied manufacturing overhead was closed out to the Cost of Goods Sold account at the end of the year.In trying to determine why overhead was overapplied by such a large amount,the company has discovered that $6,000 of depreciation on factory equipment was charged to administrative expense in error.Given the above information,which of the following statements is true?

Accepted Answer

If the entry for factory equipment depreciation had been correctly recorded,overhead would have been overapplied by $4,000 rather than $10,000.Recording factory equipment depreciation as administrative depreciation,while in error,has the same impact on net operating income as recording the entry correctly.

Question 20

Bakker 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 $77,250 and 2,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $79,000 and actual direct labor-hours were 2,400.
-The applied manufacturing overhead for the year was closest to:

Accepted Answer

Manufacturing overhead applied = Predetermined overhead rate F1F1F1S1F1F1F10 Actual direct labor-hours
= $30.90 per direct labor-hour F1F1F1S1F1F1F10 2,400 direct labor-hours
= $74,160

Quiz 2: Job-Order Costing

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?

Jurper Corporation used $150,000 of direct materials during April.At the end of April,Jurper's direct materials inventory was $25,000 more than it was at the beginning of the month.Direct materials purchases during the April amounted to:

Kelson Company applies overhead to jobs on the basis of 60% of direct labor cost.If Job 201 shows $27,000 of manufacturing overhead applied,the direct labor cost on the job was: