Complete Test Bank Job Order Costing Chapter 2 - Managerial Accounting 4e Complete Test Bank by Whitecotton. DOCX document preview.
Managerial Accounting, 4e (Whitecotton)
Chapter 2 Job Order Costing
1) A marketing consulting firm would most likely use process costing.
2) When job order costing is used, costs are accumulated on a job cost sheet.
3) Process costing averages the total cost of the process over the number of units produced.
4) Source documents are used to assign all manufacturing costs to jobs.
5) A materials requisition form is used to authorize the purchase of direct materials.
6) A job cost sheet will record the direct materials and direct labor used by the job but not the manufacturing overhead applied.
7) A predetermined overhead rate is calculated by dividing estimated total manufacturing overhead cost by estimated total cost driver.
8) Indirect materials are recorded directly on the job cost sheet.
9) When manufacturing overhead is applied to a job, a credit is made to the Work in Process account.
10) The total manufacturing cost for a job includes the amount of applied overhead using the predetermined overhead rate.
11) If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied.
12) The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.
13) To eliminate underapplied overhead at the end of the year, Manufacturing Overhead would be debited and Cost of Goods Sold would be credited.
14) The total amount of cost assigned to jobs that were completed during the year is the cost of goods sold.
15) In a service firm, the cost associated with time that employees spend on training, paperwork, and supervision is considered part of manufacturing overhead.
16) Which of the following types of firms would most likely use process costing?
A) Superior Auto Body & Repair
B) Crammond Custom Cabinets
C) Sunshine Soft Drinks
D) Jackson & Taylor Tax Service
17) Which of the following types of firms would most likely use job order costing?
A) Happy-Oh Cereal Company
B) Huey, Lewey & Dewie, Attorneys
C) SoooSweet Beverage
D) C-5 Cement Company
18) Which of the following is a characteristic of a manufacturing environment that would use job order costing?
A) Standardized production process
B) Continuous manufacturing
C) Homogenous products
D) Differentiated products
19) Which of the following statements is correct?
A) Companies must choose to use either job order costing or process costing; there is no overlap between the two systems.
B) Companies always use job order costing unless it is prohibitively expensive.
C) Companies always use process costing unless it is prohibitively expensive.
D) Companies often provide products and services that have both common and unique characteristics, so they may use a blend of job order and process costing.
20) The cost of materials used on a specific job is first captured on which source document?
A) Cost driver sheet
B) Materials requisition form
C) Labor time ticket
D) Process cost sheet
21) The source document that captures how much time a worker has spent on various jobs during the period is a:
A) cost driver sheet.
B) materials requisition form.
C) labor time ticket.
D) job cost sheet.
22) All the costs assigned to an individual job are summarized on a:
A) cost driver sheet.
B) job cost sheet.
C) materials requisition form.
D) labor time ticket.
23) A predetermined overhead rate is calculated by dividing:
A) actual manufacturing overhead cost by estimated total cost driver.
B) estimated total cost driver by estimated manufacturing overhead cost.
C) estimated manufacturing overhead cost by actual total cost driver.
D) estimated manufacturing overhead cost by estimated total cost driver.
24) Manufacturing overhead is applied to each job using which formula?
A) Predetermined overhead rate × actual value of the cost driver for the job
B) Predetermined overhead rate × estimated value of the cost driver for the job
C) Actual overhead rate × estimated value of the cost driver for the job
D) Predetermined overhead rate/actual value of the cost driver for the job
25) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000 and actual labor hours were 21,000. The predetermined manufacturing overhead rate per direct labor hour would be:
A) $20.00.
B) $0.05.
C) $20.75.
D) $19.05.
26) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000 and actual labor hours were 21,000. The amount of manufacturing overhead applied to production would be:
A) $400,000.
B) $415,000.
C) $420,000.
D) $435,750.
27) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000 and actual labor hours were 21,000. The predetermined overhead rate per direct labor hour would be:
A) $10.00.
B) $1.05.
C) $10.75.
D) $10.24.
28) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000 and actual labor hours were 21,000. The amount of manufacturing overhead applied to production would be:
A) $200,000.
B) $215,000.
C) $210,000.
D) $225,750.
29) Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000 and actual direct labor hours were 19,000. The predetermined overhead rate per direct labor hour would be:
A) $22.50.
B) $25.00.
C) $23.68.
D) $26.32.
30) Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000 and actual direct labor hours were 19,000. The amount of manufacturing overhead applied to production would be:
A) $500,000.
B) $450,000.
C) $427,500.
D) $475,000.
31) Kilt Company had the following information for the year:
|
|
|
Direct materials used | $ | 110,000 |
Direct labor incurred (5,000 hours) | $ | 150,000 |
Actual manufacturing overhead incurred | $ | 166,000 |
Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours. Assume the only inventory balance is an ending Work in Process balance of $17,000. How much overhead was applied during the year?
A) $231,000
B) $150,000
C) $166,000
D) $210,000
32) Sawyer Company had the following information for the year:
|
|
|
Direct materials used | $ | 190,000 |
Direct labor incurred (7,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 273,000 |
Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,000. How much overhead was applied during the year?
A) $245,000
B) $273,000
C) $280,000
D) $320,000
33) Jackson Company had the following information for the year:
|
|
|
Direct materials used | $ | 295,000 |
Direct labor incurred (9,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 343,000 |
Jackson Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $19,000. How much overhead was applied during the year?
A) $245,000
B) $343,000
C) $360,000
D) $320,000
34) Which of the following represents the cost of materials purchased but not yet issued to production?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
35) Which of the following represents the accumulated costs of incomplete jobs?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
36) Which of the following represents the cost of jobs completed but not yet sold?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
37) Which of the following represents the cost of the jobs sold during the period?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
38) When manufacturing overhead is applied to production, which of the following accounts is credited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Manufacturing Overhead
39) When materials are purchased, which of the following accounts is debited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
40) When direct materials are used in production, which of the following accounts is debited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
41) When direct materials are used in production (as noted by a materials requisition form), which of the following accounts is credited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
42) When units are completed, the cost associated with the job is credited to which account?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
43) When units are sold, the cost associated with the units is credited to which account?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
44) When units are completed, the cost associated with the job is debited to which account?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
45) When units are sold, the cost associated with the units is debited to which account?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
46) When materials are placed into production:
A) Raw Materials Inventory is debited if the materials are traced directly to the job.
B) Work in Process Inventory is debited if the materials are traced directly to the job.
C) Manufacturing Overhead is debited if the materials are traced directly to the job.
D) Raw Materials Inventory is credited only if the materials are traced directly to the job, otherwise manufacturing overhead is credited.
47) If materials being placed into production are not traced to a specific job, debit:
A) Raw Materials Inventory.
B) Work in Process Inventory.
C) Manufacturing Overhead.
D) Cost of Goods Sold.
48) In recording the purchase of materials that are not traced to any specific job, which of the following is correct?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
49) Which of the following would be used to record the labor cost that is traceable to a specific job?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
50) Which of the following would be used to record the labor cost that is not traceable to a specific job?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
51) Which of the following would be used to record the usage of indirect manufacturing resources?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
52) Which of the following would be used to record the depreciation of manufacturing equipment?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
53) Which of the following would be used to record the property taxes on a factory building?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
54) Which of the following would be used to record the factory supervisor's salary?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.
55) Which of the following would be used to apply manufacturing overhead to production for the period?
A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Work in Process Inventory would be credited.
56) Which of the following would be used to apply manufacturing overhead to production for the period?
A) Credit to Raw Materials Inventory.
B) Credit to Work in Process Inventory.
C) Debit to Manufacturing Overhead.
D) Credit to Manufacturing Overhead.
57) Which of the following would be used to transfer the cost of completed goods during the period to the Finished Goods account?
A) Credit to Raw Materials Inventory.
B) Credit to Work in Process Inventory.
C) Debit to Manufacturing Overhead.
D) Credit to Manufacturing Overhead.
58) If a company uses a predetermined overhead rate, which of the following statements is correct?
A) Manufacturing Overhead will be debited for estimated overhead.
B) Manufacturing Overhead will be credited for estimated overhead.
C) Manufacturing Overhead will be debited for actual overhead.
D) Manufacturing Overhead will be credited for actual overhead.
59) Which of the following accounts is not affected by applied manufacturing overhead?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
60) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. The amount debited to the Manufacturing Overhead account would be:
A) $400,000.
B) $415,000.
C) $420,000.
D) $435,750.
61) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. The amount credited to the Manufacturing Overhead account would be:
A) $400,000.
B) $415,000.
C) $420,000.
D) $435,750.
62) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. The amount debited to the Manufacturing Overhead account would be:
A) $200,000.
B) $215,000.
C) $210,000.
D) $225,750.
63) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. The amount credited to the Manufacturing Overhead account would be:
A) $200,000.
B) $215,000.
C) $210,000.
D) $225,750.
64) Overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual overhead was $225,000, and actual direct labor hours were 19,000. The amount debited to the manufacturing overhead account would be:
A) $250,000.
B) $225,000.
C) $213,750.
D) $237,500.
65) Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, and actual direct labor hours were 19,000. The amount credited to the Manufacturing Overhead account would be:
A) $250,000.
B) $225,000.
C) $213,750.
D) $237,500.
66) Overhead costs are overapplied if the amount applied to Work in Process is:
A) greater than estimated overhead.
B) less than estimated overhead.
C) greater than actual overhead incurred.
D) less than actual overhead incurred.
67) Overhead costs are underapplied if the amount applied to Work in Process is:
A) greater than estimated overhead.
B) less than estimated overhead.
C) greater than actual overhead incurred.
D) less than actual overhead incurred.
68) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. Which of the following would be correct?
A) Overhead is underapplied by $15,000.
B) Overhead is underapplied by $5,000.
C) Overhead is overapplied by $5,000.
D) Overhead is overapplied by $15,000.
69) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. Which of the following would be correct?
A) Overhead is underapplied by $15,000.
B) Overhead is underapplied by $5,000.
C) Overhead is overapplied by $5,000.
D) Overhead is overapplied by $15,000.
70) Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, and actual direct labor hours were 19,000. Which of the following would be correct?
A) Overhead is underapplied by $25,000.
B) Overhead is underapplied by $12,500.
C) Overhead is overapplied by $12,500.
D) Overhead is overapplied by $25,000.
71) The most common method for disposing of over or underapplied overhead is to:
A) recalculate the overhead rate for the period.
B) recalculate the overhead rate for the next period.
C) make a direct adjustment to Work in Process Inventory.
D) make a direct adjustment to Cost of Goods Sold.
72) When disposed of, overapplied manufacturing overhead will:
A) increase Cost of Goods Sold.
B) increase Finished Goods.
C) decrease Cost of Goods Sold.
D) decrease Finished Goods.
73) When disposed of, underapplied manufacturing overhead will:
A) increase Cost of Goods Sold.
B) increase Finished Goods.
C) decrease Cost of Goods Sold.
D) decrease Finished Goods.
74) Underapplied overhead means:
A) too little overhead was applied to raw materials.
B) actual overhead is greater than estimated overhead.
C) finished goods will need to be credited.
D) there is a debit balance remaining in the overhead account.
75) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Cost of Goods Sold would be credited for $15,000.
B) Cost of Goods Sold would be credited for $5,000.
C) Cost of Goods Sold would be debited for $5,000.
D) Cost of Goods Sold would be debited for $15,000.
76) Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Manufacturing Overhead would be credited for $5,000.
B) Manufacturing Overhead would be credited for $20,000.
C) Manufacturing Overhead would be debited for $5,000.
D) Manufacturing Overhead would be debited for $20,000.
77) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Cost of Goods Sold would be credited for $15,000.
B) Cost of Goods Sold would be credited for $5,000.
C) Cost of Goods Sold would be debited for $5,000.
D) Cost of Goods Sold would be debited for $15,000.
78) Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Manufacturing Overhead would be credited for $5,000.
B) Manufacturing Overhead would be credited for $15,000.
C) Manufacturing Overhead would be debited for $5,000.
D) Manufacturing Overhead would be debited for $15,000.
79) Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, and actual direct labor hours were 19,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Cost of Goods Sold would be credited for $25,000.
B) Cost of Goods Sold would be credited for $12,500.
C) Cost of Goods Sold would be debited for $12,500.
D) Cost of Goods Sold would be debited for $25,000.
80) Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, and actual direct labor hours were 19,000. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct?
A) Manufacturing Overhead would be credited for $12,500.
B) Manufacturing Overhead would be credited for $25,000.
C) Manufacturing Overhead would be debited for $12,500.
D) Manufacturing Overhead would be debited for $25,000.
81) Cost of goods manufactured is the amount of cost transferred:
A) out of Finished Goods Inventory and into Cost of Goods Sold.
B) out of Finished Goods Inventory and into Work in Process Inventory.
C) out of Work in Process Inventory and into Manufacturing Overhead.
D) out of Work in Process Inventory and into Finished Goods Inventory.
82) Cost of goods completed is the same as:
A) Cost of Goods Sold.
B) Work in Process Inventory.
C) Cost of Goods Manufactured.
D) Finished Goods Inventory.
83) The Cost of Goods Manufactured Report includes all of the following except:
A) direct materials used.
B) direct labor.
C) actual manufacturing overhead.
D) applied manufacturing overhead.
84) The current manufacturing costs include ________ direct labor, ________ direct materials, and ________ manufacturing overhead.
A) actual; actual; applied
B) actual; actual; actual
C) estimated; actual; applied
D) estimated; estimated; applied
85) Cost of goods sold is the amount of cost transferred:
A) out of Finished Goods Inventory and into Cost of Goods Sold.
B) out of Work in Process Inventory and into Cost of Goods Sold.
C) out of Work in Process Inventory and into Manufacturing Overhead.
D) out of Work in Process Inventory and into Finished Goods Inventory.
86) Ragtime Company had the following information for the year:
|
|
|
Direct materials used | $ | 110,000 |
Direct labor incurred (5,000 hours) | $ | 150,000 |
Actual manufacturing overhead incurred | $ | 166,000 |
Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was cost of goods manufactured?
A) $260,000
B) $426,000
C) $435,000
D) $418,000
87) Ragtime Company had the following information for the year:
|
|
|
Direct materials used | $ | 110,000 |
Direct labor incurred (5,000 hours) | $ | 150,000 |
Actual manufacturing overhead incurred | $ | 166,000 |
Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was adjusted cost of goods sold?
A) $435,000
B) $426,000
C) $418,000
D) $409,000
88) Sawyer Company had the following information for the year:
|
|
|
Direct materials used | $ | 190,000 |
Direct labor incurred (7,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 273,000 |
Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $9,000. What was cost of goods manufactured?
A) $715,000
B) $708,000
C) $755,000
D) $706,000
89) Sawyer Company had the following information for the year:
|
|
|
Direct materials used | $ | 190,000 |
Direct labor incurred (7,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 273,000 |
Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $9,000. What was adjusted cost of goods sold?
A) $715,000
B) $708,000
C) $706,000
D) $699,000
90) Jenkins Company had the following information for the year:
|
|
|
Direct materials used | $ | 295,000 |
Direct labor incurred (9,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 343,000 |
Jenkins Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,000. What was cost of goods manufactured?
A) $841,000
B) $860,000
C) $883,000
D) $900,000
91) Jenkins Company had the following information for the year:
|
|
|
Direct materials used | $ | 295,000 |
Direct labor incurred (9,000 hours) | $ | 245,000 |
Actual manufacturing overhead incurred | $ | 343,000 |
Jenkins Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,000. What was adjusted cost of goods sold?
A) $900,000
B) $883,000
C) $881,000
D) $864,000
92) McGown Corp. has the following information:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 20,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 15,000 |
| $ | 18,000 |
|
Finished Goods Inventory | $ | 30,000 |
| $ | 20,000 |
|
Additional information for the year is as follows:
|
|
|
Raw materials purchases | $ | 100,000 |
Direct labor | $ | 75,000 |
Manufacturing overhead applied | $ | 80,000 |
Indirect materials | $ | 0 |
Compute the direct materials used in production.
A) $20,000
B) $30,000
C) $110,000
D) $90,000
93) McGown Corp. has the following information:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 20,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 15,000 |
| $ | 18,000 |
|
Finished Goods Inventory | $ | 30,000 |
| $ | 20,000 |
|
Additional information for the year is as follows:
|
|
|
Raw materials purchases | $ | 100,000 |
Direct labor | $ | 75,000 |
Manufacturing overhead applied | $ | 80,000 |
Indirect materials | $ | 0 |
Compute the current manufacturing costs.
A) $245,000
B) $255,000
C) $65,000
D) $68,000
94) McGown Corp. has the following information:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 20,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 15,000 |
| $ | 18,000 |
|
Finished Goods Inventory | $ | 30,000 |
| $ | 20,000 |
|
Additional information for the year is as follows:
|
|
|
Raw materials purchases | $ | 100,000 |
Direct labor | $ | 75,000 |
Manufacturing overhead applied | $ | 80,000 |
Indirect materials | $ | 0 |
Compute the cost of goods manufactured.
A) $248,000
B) $242,000
C) $265,000
D) $235,000
95) McGown Corp. has the following information:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 20,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 15,000 |
| $ | 18,000 |
|
Finished Goods Inventory | $ | 30,000 |
| $ | 20,000 |
|
Additional information for the year is as follows:
|
|
|
Raw materials purchases | $ | 100,000 |
Direct labor | $ | 75,000 |
Manufacturing overhead applied | $ | 80,000 |
Indirect materials | $ | 0 |
Compute the unadjusted cost of goods sold.
A) $133,000
B) $242,000
C) $252,000
D) $255,000
96) Santos Inc. had the following information for the preceding year:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 40,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 35,000 |
| $ | ?? |
|
Finished Goods Inventory | $ | 30,000 |
| $ | ?? |
|
Additional information for the year is as follows:
|
|
|
Direct materials used | $ | 200,000 |
Direct labor | $ | 150,000 |
Manufacturing overhead applied | $ | 160,000 |
Cost of goods manufactured | $ | 525,000 |
Cost of goods sold | $ | 544,000 |
What was the ending Work in Process Inventory balance on 12/31?
A) $20,000
B) $11,000
C) $50,000
D) $54,000
97) Santos Inc. had the following information for the preceding year:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Raw Materials Inventory | $ | 40,000 |
| $ | 30,000 |
|
Work in Process Inventory | $ | 35,000 |
| $ | ?? |
|
Finished Goods Inventory | $ | 30,000 |
| $ | ?? |
|
Additional information for the year is as follows:
|
|
|
Direct materials used | $ | 200,000 |
Direct labor | $ | 150,000 |
Manufacturing overhead applied | $ | 160,000 |
Cost of goods manufactured | $ | 525,000 |
Unadjusted cost of goods sold | $ | 544,000 |
What was the ending Finished Goods Inventory balance on 12/31?
A) $20,000
B) $11,000
C) $50,000
D) $54,000
98) Mendez Inc. had the following information for the preceding year:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Work in Process Inventory | $ | ?? |
| $ | 35,000 |
|
Finished Goods Inventory | $ | ?? |
| $ | 30,000 |
|
Additional information for the year is as follows:
|
|
|
Direct materials used | $ | 200,000 |
Direct labor | $ | 150,000 |
Manufacturing overhead applied | $ | 160,000 |
Cost of goods manufactured | $ | 525,000 |
Cost of goods sold | $ | 544,000 |
What was the beginning Work in Process Inventory balance on 1/1?
A) $49,000
B) $65,000
C) $50,000
D) $69,000
99) Mendez Inc. had the following information for the preceding year:
| Beginning Inventory (1/1) |
| Ending Inventory (12/31) |
| ||
Work in Process Inventory | $ | ?? |
| $ | 35,000 |
|
Finished Goods Inventory | $ | ?? |
| $ | 30,000 |
|
Additional information for the year is as follows:
|
|
|
Direct materials used | $ | 200,000 |
Direct labor | $ | 150,000 |
Manufacturing overhead applied | $ | 160,000 |
Cost of goods manufactured | $ | 525,000 |
Unadjusted cost of goods sold | $ | 544,000 |
What was the beginning Finished Goods Inventory balance on 1/1?
A) $49,000
B) $65,000
C) $50,000
D) $69,000
100) Job order costing systems for companies that compete in, for example, the green building arena should reflect:
A) only costs in dollars.
B) only sustainability-related metrics.
C) both costs of materials in dollars and sustainability-related metrics.
D) neither costs of materials in dollars nor sustainability-related metrics.
101) To incorporate sustainability into the Cost of Goods Manufactured report, include information on all of the following except:
A) the cost of direct materials used compared to standard (non-sustainable) materials.
B) indirect labor rates.
C) source information for direct materials used.
D) sustainability benchmarking information for peer companies.
102) Which of the following is incorrect regarding service firms?
A) Each client or account is equivalent to a process in a process costing firm.
B) The accounting system will track the time and resources spent serving a specific client or account.
C) Managers of service firms need cost information to price their services, to budget and control costs, and to determine the profitability of different types of clients.
D) The primary driver used to assign costs is billable hours.
103) Service firms:
A) tend to use a lot of direct materials in addition to billable hours.
B) tend to incur few indirect costs that cannot be traced to specific clients or accounts.
C) assign indirect costs to individual clients or accounts based on an allocation base such as billable hours.
D) use process costing to assign costs to individual clients or accounts.
104) Optimum Finance Inc. provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client.
Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000. What is the predetermined overhead rate that Optimum will use for the current year?
A) $1.50 per dollar of consultant labor cost
B) $1.35 per dollar of consultant labor cost
C) $0.67 per dollar of consultant labor cost
D) $1.45 per dollar of consultant labor cost
105) Optimum Finance Inc. provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client.
Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000. During the year, Optimum provided 64 hours of consulting services to Robert Howard for which Optimum pays an average of $18 per hour. What is the total cost of providing services to Robert?
A) $2,707
B) $2,822
C) $1,924
D) $2,880
106) Optimum Finance Inc. provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client.
Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000. During the year, Optimum provided 42 hours of consulting services to Joan Clair for which Optimum pays an average of $20 per hour. What is the total cost of providing services to Joan?
A) $2,100
B) $1,974
C) $2,058
D) $1,403
107) Deer Lake Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 150% of direct labor cost. Treating each case independently, find the missing amounts for a through l:
Case #1 | Case #2 | Case #3 | |
Direct materials used | $20,000 | e. | $10,000 |
Direct labor | $25,000 | f. | i. |
Manufacturing overhead applied | a. | $45,000 | j. |
Total manufacturing costs | b. | $95,000 | $35,000 |
Beginning Work in Process | $10,000 | g. | $6,000 |
Ending Work in process | $8,000 | $10,000 | k. |
Cost of goods manufactured | c. | $93,000 | $36,000 |
Beginning Finished Goods | $12,000 | $12,000 | l. |
Ending Finished Goods | $15,500 | h. | $4,000 |
Cost of goods sold (unadjusted) | d. | $91,000 | $37,000 |
108) Barone Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 100% of direct labor cost. Treating each case independently, find the missing amounts for a through l:
Case #1 | Case #2 | Case #3 | |
Direct materials used | $20,000 | e. | $10,000 |
Direct labor | $20,000 | f. | i. |
Manufacturing overhead applied | a. | $30,000 | j. |
Total manufacturing costs | b. | $80,000 | $30,000 |
Beginning Work in Process | $10,000 | g. | $4,000 |
Ending Work in process | $12,000 | $5,000 | k. |
Cost of goods manufactured | c. | $79,000 | $28,000 |
Beginning Finished Goods | $12,000 | $15,000 | l. |
Ending Finished Goods | $9,000 | h. | $15,000 |
Cost of goods sold (unadjusted) | d. | $81,000 | $26,000 |
109) Miller Park Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 80% of direct labor cost. Treating each case independently, find the missing amounts for a through l:
Case #1 | Case #2 | Case #3 | |
Direct materials used | $20,000 | e. | $20,000 |
Direct labor | $25,000 | $20,000 | i. |
Manufacturing overhead applied | a. | f. | j. |
Total manufacturing costs | b. | $46,000 | $38,000 |
Beginning Work in Process | $9,000 | g. | $6,000 |
Ending Work in process | $7,000 | $6,000 | $3,000 |
Cost of goods manufactured | c. | $45,000 | k. |
Beginning Finished Goods | $13,000 | $8,000 | l. |
Ending Finished Goods | $14,000 | h. | $8,000 |
Cost of goods sold (unadjusted) | d. | $48,000 | $43,000 |
110) Nashville Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 200% of direct labor cost. Treating each case independently, find the missing amounts for a through l:
Case #1 | Case #2 | Case #3 | |
Direct materials used | a. | e. | $20,000 |
Direct labor | $20,000 | f. | $30,000 |
Manufacturing overhead applied | b. | $45,000 | i. |
Total manufacturing costs | $70,000 | $90,000 | j. |
Beginning Work in Process | c. | g. | $15,000 |
Ending Work in process | $10,000 | $3,000 | $17,000 |
Cost of goods manufactured | $67,000 | $94,000 | k. |
Beginning Finished Goods | $12,000 | $14,000 | l. |
Ending Finished Goods | d. | $12,000 | $15,000 |
Cost of goods sold (unadjusted) | $63,000 | h. | $113,000 |
111) Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 1478), as summarized below:
Job Number:1478 |
|
|
|
|
|
|
|
|
| |||||
Date Started: 4/07/20x8 |
|
|
|
|
|
|
| |||||||
Date Completed: 4/22/20x8 |
|
|
|
|
|
|
|
| ||||||
Description: | Cherry kitchen cabinets |
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
| Applied | ||||
Direct Materials | Direct Labor | Manufacturing Overhead | ||||||||||||
Req. No | Amount | Ticket | Hours |
| Amount | Hours | Rate | Amount | ||||||
385 | $ | 300 |
| 128 | 16 |
| $ | 288 |
|
|
|
| ||
391 |
| 225 |
| 130 | 23 |
|
| 426 |
|
|
|
| ||
395 |
| 150 |
| 133 | 12 |
|
| 264 |
|
|
|
| ||
401 |
| 215 |
|
|
|
|
|
|
|
|
|
| ||
Total | $ | 890 |
| Total | 51 |
| $ | 978 |
|
|
|
| ||
|
| Cost Summary |
|
|
|
|
|
| ||||||
Direct Material Cost | $ | 890 |
|
|
|
| ||||||||
Direct Labor Cost |
| 978 |
|
|
|
| ||||||||
Applied Manufacturing Overhead |
| ? |
|
|
|
| ||||||||
Total Cost |
| ? |
|
|
|
| ||||||||
Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour.
a. How much overhead would be applied to Job #1478?
b. What is the total cost of Job #1478?
112) Russo Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 1887), as summarized below:
Job Number:1887 |
|
|
|
|
|
|
|
|
| ||||
Date Started: 4/17/20x8 |
|
|
|
|
|
|
| ||||||
Date Completed: 4/29/20x8 |
|
|
|
|
|
|
|
| |||||
Description: | Pecan kitchen cabinets |
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
| Applied | |||
Direct Materials | Direct Labor | Manufacturing Overhead | |||||||||||
Req. No | Amount | Ticket | Hours |
| Amount | Hours | Rate | Amount | |||||
385 | $ | 400 |
| 128 | 18 |
| $ | 396 |
|
|
|
| |
391 |
| 325 |
| 130 | 29 |
|
| 696 |
|
|
|
| |
395 |
| 250 |
| 133 | 15 |
|
| 390 |
|
|
|
| |
401 |
| 415 |
|
|
|
|
|
|
|
|
|
| |
Total | $ | 1,390 |
| Total | 62 |
| $ | 1,482 |
|
|
|
| |
|
| Cost Summary |
|
|
|
|
|
| |||||
Direct Material Cost | $ | 1,390 |
|
|
|
| |||||||
Direct Labor Cost |
| 1,482 |
|
|
|
| |||||||
Applied Manufacturing Overhead |
| ? |
|
|
|
| |||||||
Total Cost |
| ? |
|
|
|
| |||||||
Russo applies overhead to jobs at a rate of $18 per direct labor hour.
a. How much overhead would be applied to Job #1887?
b. What is the total cost of Job #1887?
113) Geller Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 12478), as summarized below:
Job Number: #12478 |
|
|
|
|
|
|
|
|
| ||||
Date started: 8/05/20x8 |
|
|
|
|
|
|
| ||||||
Date completed: 8/25/20x8 |
|
|
|
|
|
|
|
| |||||
Description: | Butternut kitchen cabinets |
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
| Applied | |||
Direct materials | Direct labor | manufacturing overhead | |||||||||||
Req. No | Amount | Ticket | Hours |
| Amount | Hours | Rate | Amount | |||||
385 | $ | 400 |
| 128 | 16 |
| $ | 256 |
|
|
|
| |
391 |
| 324 |
| 130 | 23 |
|
| 390 |
|
|
|
| |
395 |
| 196 |
| 133 | 12 |
|
| 186 |
|
|
|
| |
401 |
| 455 |
| 141 | 15 |
|
| 330 |
|
|
|
| |
Total | $ | 1,375 |
| Total | 66 |
| $ | 1,162 |
|
|
|
| |
|
| Cost summary |
|
|
|
|
|
| |||||
Direct material cost | $ | 1,375 |
|
|
|
| |||||||
Direct labor cost |
| 1,162 |
|
|
|
| |||||||
Applied manufacturing overhead |
| ? |
|
|
|
| |||||||
Total cost |
| ? |
|
|
|
| |||||||
Geller applies overhead to jobs at a rate of $15 per direct labor hour.
a. How much overhead would be applied to Job #12478?
b. What is the total cost of Job #12478?
114) Belton Custom Kitchens is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 3097), as summarized below:
Job Number: #3097 |
|
|
|
|
|
|
|
|
| |||
Date started: 11/10/20x8 |
|
|
|
|
|
|
| |||||
Date completed: 11/27/20x8 |
|
|
|
|
|
|
| |||||
Description: | Oak kitchen cabinets |
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| Applied | ||
Direct materials | Direct labor | manufacturing overhead | ||||||||||
Req No. | Amount | Ticket | Hours |
| Amount | Hours | Rate | Amount | ||||
1385 | $ | 300 |
| 2128 | 18 |
| $ | 396 |
|
|
|
|
1391 |
| 225 |
| 2130 | 27 |
|
| 621 |
|
|
|
|
1395 |
| 150 |
| 2133 | 14 |
|
| 308 |
|
|
|
|
1401 |
| 215 |
| 2144 | 18 |
|
| 414 |
|
|
|
|
Total | $ | 890 |
| Total | 77 |
| $ | 1,739 |
|
|
|
|
|
| Cost Summary |
|
|
|
|
|
| ||||
Direct material cost | $ | 890 |
|
|
|
| ||||||
Direct labor cost |
| 1,739 |
|
|
|
| ||||||
Applied manufacturing overhead |
| ? |
|
|
|
| ||||||
Total cost |
| ? |
|
|
|
| ||||||
Belton applies overhead to jobs at a rate of $17 per direct labor hour.
a. How much overhead would be applied to Job #3097?
b. What is the total cost of Job #3097?
115) Koebel Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Koebel Corp. estimated total manufacturing overhead cost at $500,000 and total direct labor hours of 50,000. Koebel Corp. started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory. During the year, actual manufacturing overhead incurred was $512,500 and 49,000 direct labor hours were used.
a. Calculate the predetermined overhead rate.
b. Calculate how much manufacturing overhead will be applied to production.
c. Is overhead over or underapplied? By how much?
d. What account should be adjusted for over or underapplied overhead? Should the balance be increased or decreased?
116) Cadburn Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Cadburn Corp. estimated total manufacturing overhead cost at $250,000 and total direct labor hours of 50,000. During the year actual manufacturing overhead incurred was $262,500 and 51,000 direct labor hours were used.
a. Calculate the predetermined overhead rate.
b. Calculate how much manufacturing overhead will be applied to production.
c. Is overhead over- or underapplied? By how much?
d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?
117) Chloe Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Chloe Corp. estimated total manufacturing overhead cost at $480,000 and total direct labor hours of 40,000. During the year actual manufacturing overhead incurred was $462,500 and 41,000 direct labor hours were used.
a. Calculate the predetermined overhead rate.
b. Calculate how much manufacturing overhead will be applied to production.
c. Is overhead over- or underapplied? By how much?
d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?
118) Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $270,000 and total machine hours of 45,000. During the year actual manufacturing overhead incurred was $258,750 and 46,600 machine hours were used.
a. Calculate the predetermined overhead rate.
b. Calculate how much manufacturing overhead will be applied to production.
c. Is overhead over- or underapplied? By how much?
d. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?
119) Curtis Inc. uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $75,000 for the year; direct labor was estimated to total $150,000.
| (1/1) |
| (12/31) |
| ||
Raw Materials Inventory | $ | 10,000 |
| $ | 13,000 |
|
Work in Process Inventory | $ | 22,000 |
| $ | 19,000 |
|
Finished Goods Inventory | $ | 34,000 |
| $ | 41,000 |
|
The following transactions have occurred during the year.
|
|
|
Raw materials purchases | $ | 100,000 |
Direct materials used | $ | 91,000 |
Direct labor | $ | 145,000 |
Indirect materials used | $ | 6,000 |
Indirect labor | $ | 15,000 |
Factory equipment depreciation | $ | 24,000 |
Factory rent | $ | 18,000 |
Factory utilities | $ | 7,500 |
Other factory costs | $ | 6,500 |
a. Calculate the predetermined overhead rate.
b. Calculate cost of goods manufactured.
c. Calculate the over- or underapplied overhead.
d. Calculate adjusted cost of goods sold.
120) Kayla Inc. uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $150,000 for the year; direct labor was estimated to total $300,000.
| (1/1) |
| (12/31) |
| ||
Raw Materials Inventory | $ | 20,000 |
| $ | 26,000 |
|
Work in Process Inventory | $ | 44,000 |
| $ | 38,000 |
|
Finished Goods Inventory | $ | 68,000 |
| $ | 82,000 |
|
The following transactions have occurred during the year.
|
|
|
Raw materials purchases | $ | 200,000 |
Direct materials used | $ | 182,000 |
Direct labor | $ | 290,000 |
Indirect materials used | $ | 12,000 |
Indirect labor | $ | 30,000 |
Factory equipment depreciation | $ | 48,000 |
Factory rent | $ | 36,000 |
Factory utilities | $ | 15,000 |
Other factory costs | $ | 13,000 |
a. Calculate the predetermined overhead rate.
b. Calculate cost of goods manufactured.
c. Calculate the over- or underapplied overhead.
d. Calculate adjusted cost of goods sold.
121) Cadbury Company uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $120,000 for the year; direct labor was estimated to total $150,000.
| (1/1) |
| (12/31) |
| ||
Raw Materials Inventory | $ | 13,000 |
| $ | 10,000 |
|
Work in Process Inventory | $ | 19,000 |
| $ | 22,000 |
|
Finished Goods Inventory | $ | 41,000 |
| $ | 32,000 |
|
The following transactions have occurred during the year.
|
|
|
Raw materials purchases | $ | 100,000 |
Direct materials used | $ | 91,000 |
Direct labor | $ | 125,000 |
Indirect materials used | $ | 12,000 |
Indirect labor | $ | 18,000 |
Factory equipment depreciation | $ | 28,000 |
Factory rent | $ | 22,000 |
Factory utilities | $ | 9,500 |
Other factory costs | $ | 8,500 |
a. Calculate the predetermined overhead rate.
b. Calculate cost of goods manufactured.
c. Calculate the over- or underapplied overhead.
d. Calculate adjusted cost of goods sold.
122) Ecola Company uses a job order costing system. Manufacturing overhead is applied on the basis of direct labor cost. Total manufacturing overhead was estimated to be $120,000 for the year; direct labor was estimated to total $150,000.
| (1/1) |
| (12/31) |
| ||
Raw Materials Inventory | $ | 13,000 |
| $ | 10,000 |
|
Work in Process Inventory | $ | 29,000 |
| $ | 22,000 |
|
Finished Goods Inventory | $ | 41,000 |
| $ | 32,000 |
|
The following transactions have occurred during the year.
|
|
|
Raw materials purchases | $ | 100,000 |
Direct materials used | $ | 87,000 |
Direct labor | $ | 135,000 |
Indirect materials used | $ | 16,000 |
Indirect labor | $ | 19,000 |
Factory equipment depreciation | $ | 28,000 |
Factory rent | $ | 15,000 |
Factory utilities | $ | 11,500 |
Other factory costs | $ | 8,500 |
a. Calculate the predetermined overhead rate.
b. Calculate cost of goods manufactured.
c. Calculate the over or under-applied overhead.
d. Calculate adjusted cost of goods sold.
123) Josie Inc. has provided the following information for the year ended 20x8:
a. Purchased raw materials on account for $120,000.
b. Issued $115,000 in raw materials to production ($22,000 were not traceable to specific jobs).
c. Incurred $115,000 in direct labor costs (14,375 hours) and $62,500 in supervision costs (paid in cash).
d. Incurred the following additional manufacturing overhead costs: factory lease $24,000 (paid in cash); depreciation on equipment $20,000; custodial supplies $7,500 (paid in cash).
e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $75,000; sales commissions $88,000.
f. Applied manufacturing overhead to jobs in process at a rate of $10 per direct labor hour.
g. Completed jobs costing a total of $345,000.
h. Sold jobs for $425,000 on account. The cost of the jobs was $342,000.
i. Closed the Manufacturing Overhead account balance.
Prepare the journal entries to record these transactions.
124) Frontier Inc. has provided the following information for the year ended 20x8:
a. Purchased raw materials on account for $240,000.
b. Issued $230,000 in raw materials to production ($32,000 were not traceable to specific jobs).
c. Incurred $242,000 in direct labor costs (24,120 hours) and $92,500 in supervision costs (paid in cash).
d. Incurred the following additional manufacturing overhead costs: factory utilities $24,000 (paid in cash); depreciation on equipment $45,000; indirect supplies $17,500 (paid in cash).
e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $75,000; sales salaries $88,000.
f. Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour.
g. Completed jobs costing a total of $644,000.
h. Sold jobs for $856,000 on account. The cost of the jobs was $642,000.
i. Closed the manufacturing overhead account balance.
Prepare the journal entries to record these transactions.
125) Northwest Inc. has provided the following information for the year ended 20x8:
a. Purchased raw materials on account for $150,000.
b. Issued $130,000 in raw materials to production ($34,000 were not traceable to specific jobs).
c. Incurred $144,000 in direct labor costs (14,120 hours) and $62,500 in supervision costs (paid in cash).
d. Incurred the following additional manufacturing overhead costs: factory lease $36,000 (paid in cash); depreciation on equipment $30,000; indirect supplies $13,500 (paid in cash).
e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $45,000; sales commissions $48,000.
f. Applied manufacturing overhead to jobs in process at a rate of $13 per direct labor hour.
g. Completed jobs costing a total of $415,000.
h. Sold jobs for $625,000 on account. The cost of the jobs was $412,000.
i. Closed the Manufacturing Overhead account balance.
Prepare the journal entries to record these transactions.
126) Shellenback Inc. has provided the following information for the year ended 20x8:
a. Purchased raw materials on account for $200,000.
b. Issued $185,000 in raw materials to production ($12,000 were not traceable to specific jobs).
c. Incurred $155,000 in direct labor costs (14,750 hours), $52,500 in supervision costs (paid in cash).
d. Incurred the following additional manufacturing overhead costs: factory lease $22,000 (paid in cash); depreciation on equipment $26,000; factory utilities $13,500 (paid in cash).
e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $55,000; sales commissions $58,000.
f. Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour.
g. Completed jobs costing a total of $457,000.
h. Sold jobs for $735,000 on account. The cost of the jobs was $441,000.
i. Closed the manufacturing overhead account balance.
Prepare the journal entries to record these transactions.
127) Highview Corp. applies manufacturing overhead to production at 125% of direct labor cost. During the year ended 20x8, manufacturing overhead of $100,000 was applied to production; actual manufacturing overhead was $109,000. Beginning Work in Process Inventory was $15,000 and beginning Finished Goods Inventory was $35,000. Work in Process Inventory increased by 10% during the year and Finished Goods Inventory decreased by 20% during the year. Sales for the year ended 20xx were $450,000, yielding a $130,000 gross profit.
Complete the following schedule:
Direct materials used in production | |
Direct labor | |
Manufacturing overhead applied | |
Current manufacturing costs | |
Beginning Work in Process Inventory | |
Ending Work in Process Inventory | |
Cost of goods manufactured | |
Beginning Finished Goods Inventory | |
Ending Finished Goods Inventory | |
Unadjusted Cost of Goods Sold | |
Overhead adjustment | |
Adjusted Cost of Goods Sold |
128) Oscar Corp. applies manufacturing overhead to production at 150% of direct labor cost. During the year ended 20xx, manufacturing overhead of $180,000 was applied to production; actual manufacturing overhead was $199,000. Beginning Work in Process Inventory was $20,000 and ending Work in Process Inventory was $24,000. Beginning Finished Goods Inventory was $42,000, ending Finished Goods Inventory was $39,000. Sales for the year ended 20xx were $580,000, yielding a $117,000 gross profit.
Complete the following schedule:
Direct materials used in production | |
Direct labor | |
Manufacturing overhead applied | |
Current manufacturing costs | |
Beginning Work in Process Inventory | |
Ending Work in Process Inventory | |
Cost of goods manufactured | |
Beginning Finished Goods Inventory | |
Ending Finished Goods Inventory | |
Unadjusted Cost of Goods Sold | |
Overhead adjustment | |
Adjusted Cost of Goods Sold |
129) Superior Corp. applies manufacturing overhead to production at 75% of direct labor cost. During the year ended 20xx, manufacturing overhead of $150,000 was applied to production; actual manufacturing overhead was $156,000. Ending Work in Process Inventory was $22,000 and ending Finished Goods Inventory was $36,000. Work in Process Inventory increased by 10% during the year and Finished Goods Inventory increased by 20% during the year. Unadjusted Cost of Goods Sold was $575,000.
Complete the following schedule:
Direct materials used in production | |
Direct labor | |
Manufacturing overhead applied | |
Current manufacturing costs | |
Beginning Work in Process Inventory | |
Ending Work in Process Inventory | |
Cost of goods manufactured | |
Beginning Finished Goods Inventory | |
Ending Finished Goods Inventory | |
Unadjusted Cost of Goods Sold | |
Overhead adjustment | |
Adjusted Cost of Goods Sold |
130) Christine Corp. applies manufacturing overhead to production at 80% of direct labor cost. During the year ended 20xx, manufacturing overhead of $200,000 was applied to production; actual manufacturing overhead was $189,000. Beginning Work in Process Inventory was $25,000, and beginning Finished Goods Inventory was $45,000. Work in Process Inventory decreased by 20% during the year and Finished Goods Inventory decreased by 10% during the year. Adjusted Cost of Goods Sold was $623,500 for the year ended 20xx.
Complete the following schedule:
Direct materials used in production | |
Direct labor | |
Manufacturing overhead applied | |
Current manufacturing costs | |
Beginning Work in Process Inventory | |
Ending Work in Process Inventory | |
Cost of goods manufactured | |
Beginning Finished Goods Inventory | |
Ending Finished Goods Inventory | |
Unadjusted Cost of Goods Sold | |
Overhead adjustment | |
Adjusted Cost of Goods Sold |
131) Pinnacle Consulting employs two CPAs, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $519,750 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $225,000, and she is expected to bill 2,000 hours during the year. Steve is a senior associate, his annual salary is $121,500, and he is expected to bill 1,800 hours during the year.
a. Calculate the predetermined overhead rate.
b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Judy and Steve.
132) Ace Architects employs two architects, each having a different area of specialization. Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction. Ace expects to incur total overhead costs of $779,625 during the year and applies overhead based on annual salary costs. Caitlin is a senior partner, her annual salary is $168,750, and she is expected to bill 2,000 hours during the year. Zachary is a senior associate, his annual salary is $91,125, and he is expected to bill 1,800 hours during the year.
a. Calculate the predetermined overhead rate.
b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Caitlin and Zachary.