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Exam 2: Job-Order Costing

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Question 61

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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:

A) $74,160
B) $71,184
C) $75,840
D) $79,008

E) A) and C)
F) B) and C)

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Question 62

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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 amount of direct materials cost in the March 31 Work in Process inventory account was:

A) $5,250
B) $3,500
C) $9,000
D) $8,750

E) None of the above
F) B) and C)

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Question 63

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Kaiser Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below: The predetermined overhead rate for the recently completed year was closest to:

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?

Job 731 was recently completed.The following data have been recorded on its job cost sheet: The company 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 731 would be:

The Work in Process inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period.The job cost sheets of two uncompleted jobs show charges of $500 and $300 for direct materials,and charges of $400 and $600 for direct labor.From this information,it appears that the company is using a predetermined overhead rate,as a percentage of direct labor costs,of:

Straley Inc.has provided the following data for the month of February.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 $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. Required: Provide the journal entry that would record the allocation of underapplied or overapplied among work in process,finished goods,and cost of goods sold.

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 Manufacturing Overhead account as a consequence of the raw materials transactions in April total:

During September, Stutzman Corporation incurred $86,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $81,000. -The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

During September, Stutzman Corporation incurred $86,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $81,000. -The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:

Gressett 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 $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. -The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for April would include the following:

McWhite Inc. has provided the following data for the month of October. 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. -The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for October would include the following:

On February 1,Caddell Corporation had $28,000 of raw materials on hand.During the month,the company purchased an additional $70,000 of raw materials.During February,$81,000 of raw materials were requisitioned from the storeroom for use in production.The debits to the Raw Materials account for the month of February total:

Hults Corporation has provided data concerning the company's Manufacturing Overhead account for the month of November.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 $75,000 and the total of the credits to the account was $57,000.Which of the following statements is true?

During February,Degan Inc.transferred $60,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,000.The journal entries to record these transactions would include a:

When a job has been completed,the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a credit to Work in Process.

The following partially completed T-accounts summarize the transactions of Belson Company for last year: At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold. -The indirect labor cost is:

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:

Acitelli 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:

The following cost data relate to the manufacturing activities of Newberry Company during the just completed year: The company uses a predetermined overhead rate to apply manufacturing overhead cost to production.The predetermined overhead rate for the year was $15 per machine-hour.A total of 23,000 machine-hours were recorded for the year. Required: a.Compute the amount of underapplied or overapplied manufacturing overhead cost for the year. b.Prepare a Schedule of Cost of Goods Manufactured for the year.