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Exam 2: Job-Order Costing

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Question 21

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Collins Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information applies to the Corporation for the current year: The manufacturing overhead cost for the current year will be:

A) $17,000 overapplied
B) $17,000 underapplied
C) $55,000 overapplied
D) $55,000 underapplied

E) A) and B)
F) B) and D)

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Question 22

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Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours. For the current year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost. The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials. Required: Prepare journal entries to record Quark's transactions for the month of January. Do not close out the manufacturing overhead account.

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Predetermined overhead rate = Estimated...

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Question 23

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Acton 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 direct labor rate for Brent Corporation is $9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour. During May, the company purchased $60,000 in raw materials (all direct materials) and worked 3,200 direct labor-hours. The Raw Materials inventory (all direct materials) decreased by $3,000 between the beginning and end of May. The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked. There was no Work in Process inventory on May 31. If overhead was underapplied by $2,500 during May, the actual overhead cost for the month must have been:

Soledad Corporation had $36,000 of raw materials on hand on December 1. During the month, the Corporation purchased an additional $71,000 of raw materials. The journal entry to record the purchase of raw materials would include a:

Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company: The amount of direct materials cost in the May 31 Work in Process inventory account was:

At the beginning of December, Sneeden Corporation had $32,000 of raw materials on hand. During the month, the Corporation purchased an additional $71,000 of raw materials. During December, $75,000 of raw materials were requisitioned from the storeroom for use in production. The credits entered in the Raw Materials account during the month of December total:

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?

Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to:

Tondre Inc. has provided the following data for the month of July: The cost of goods manufactured for July is:

Brusveen Corporation applies manufacturing overhead to jobs on the basis of direct labor-hours. The following information relates to Brusveen for last year: What was Brusveen's underapplied or overapplied overhead for last year?

Dapper Corporation had only one job in process on May 1. The job had been charged with $3,400 of direct materials, $4,640 of direct labor, and $9,200 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.00 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $7,540 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The balance in the raw materials inventory account on May 30 was:

Killian Corporation began operations on January 1. The predetermined overhead rate was set at $6.00 per direct labor-hour. Debits to Work in Process for the year totaled $550,000. Credits to Work in Process totaled $480,000. Analysis of the Corporation's records indicate that direct labor cost totaled $250,000 for the year, which represents 20,000 direct labor-hours. The Corporation's ending work in process inventory consisted of one job, Job 42. The job had been charged with $28,000 of direct labor cost, which consisted of 2,000 actual labor-hours. The direct materials cost in Job 42 totaled:

Maggie Manufacturing Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied overhead is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company: Required: Determine the following: a. The August 1 balance of Raw Materials. b. The amount of manufacturing overhead applied to jobs in August. c. The Cost of Goods Manufactured for August. d. The overapplied or underapplied manufacturing overhead for the month. Label this amount appropriately.

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

Compute the amount of raw materials used during August if $25,000 of raw materials were purchased during the month and the inventories were as follows:

Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation 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 593 would be:

Messana Corporation reported the following data for the month of August: The direct materials cost for August is:

During October, Dorinirl Corporation incurred $60,000 of direct labor costs and $5,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

During February, Irving Corporation incurred $65,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $60,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: