ACCT 2302 managerial accounting ch 3

182) Dagostino Corporation uses a job-order costing system. The following data relate to the just completed month's operations. (1) Direct materials requisitioned for use in production, $154,000 (2) Indirect materials requisitioned for use in production, $45,000 (3) Direct labor wages incurred, $94,000 (4) Indirect labor wages incurred, $119,000 (5) Depreciation recorded on factory equipment, $44,000 (6) Additional manufacturing overhead costs incurred, $83,000 (7) Manufacturing overhead costs applied to jobs, $236,000 (8) Cost of jobs completed and transferred from Work in Process to Finished Goods, $458,000 Use the following T-accounts to

answer the following questions Work In Process Bal. $48,000 Manufacturing Overhead The ending balance in the Work in Process account is closest to: A) $94,000 B) $84,000 C) $74,000 D) $64,000 --answer: C Explanation: Work In Process Bal. 48,000 (8) 458,000 (1) 154,000 (3) 94,000 (7) 236,000 Bal. 74,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

184) Dagostino Corporation uses a job-order costing system. The following data relate to the just completed month's operations. (1) Direct materials requisitioned for use in production, $154,000 (2) Indirect materials requisitioned for use in production, $45,000 (3) Direct labor wages incurred, $94,000 (4) Indirect labor wages incurred, $119,000 (5) Depreciation recorded on factory equipment, $44,000 (6) Additional manufacturing overhead costs incurred, $83,000 (7) Manufacturing overhead costs applied to jobs, $236,000 (8) Cost of jobs completed and transferred from Work in Process to Finished Goods, $458,000 Use the following T-accounts to

answer the following questions Work In Process Bal. $48,000 Manufacturing Overhead The manufacturing overhead was: A) $10,000 Underapplied B) $10,000 Overapplied C) $55,000 Underapplied D) $55,000 Overapplied --answer: C Explanation: Manufacturing Overhead (2) 45,000 (7) 236,000 (4) 119,000 (5) 44,000 (6) 83,000 291,000 236,000 Bal. 55,000 The overhead is $55,000 underapplied because the actual manufacturing overhead cost incurred of $291,000 exceeds the manufacturing overhead applied of $236,000 by $55,000. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

183) Dagostino Corporation uses a job-order costing system. The following data relate to the just completed month's operations. (1) Direct materials requisitioned for use in production, $154,000 (2) Indirect materials requisitioned for use in production, $45,000 (3) Direct labor wages incurred, $94,000 (4) Indirect labor wages incurred, $119,000 (5) Depreciation recorded on factory equipment, $44,000 (6) Additional manufacturing overhead costs incurred, $83,000 (7) Manufacturing overhead costs applied to jobs, $236,000 (8) Cost of jobs completed and transferred from Work in Process to Finished Goods, $458,000 Use the following T-accounts to

answer the following questions Work In Process Bal. $48,000 Manufacturing Overhead The total amount of manufacturing overhead actually incurred was: A) $246,000 B) $291,000 C) $236,000 D) $247,000 --answer: B Explanation: Manufacturing Overhead (2) 45,000 (7) 236,000 (4) 119,000 (5) 44,000 (6) 83,000 291,000 236,000 Actual manufacturing overhead costs are debited to Manufacturing Overhead. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

187) Leak Enterprises LLC recorded the following transactions for the just completed month. The company had no beginning inventories. (1) Raw materials purchased for cash, $96,000 (2) Direct materials requisitioned for use in production, $69,000 (3) Indirect materials requisitioned for use in production, $22,000 (4) Direct labor wages incurred and paid, $129,000 (5) Indirect labor wages incurred and paid, $16,000 (6) Additional manufacturing overhead costs incurred and paid, $121,000 (7) Manufacturing overhead costs applied to jobs, $163,000 (8) All of the jobs in process were completed. (9) All of the completed jobs were shipped to customers. (10) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Use the following T-accounts to

answer the following questions. Cash Raw Materials Work In Process Finished Goods Manufacturing Overhead Cost of Goods Sold The adjusted cost of goods sold for the month is: A) $335,000 B) $361,000 C) $357,000 D) $365,000 --answer: C Explanation: Cash (1) 96,000 (4) 129,000 (5) 16,000 (6) 121,000 Raw Materials Bal. 0 (1) 96,000 (2) 69,000 (3) 22,000 Bal. 5,000 Work In Process Bal. 0 (2) 69,000 (4) 129,000 (7) 163,000 (8) 361,000 Bal. 0 Finished Goods Bal. 0 (8) 361,000 (9) 361,000 Bal. 0 Manufacturing Overhead (3) 22,000 (7) 163,000 (5) 16,000 (6) 121,000 159,000 163,000 (10) 4,000 Cost of Goods Sold (9) 361,000 (10) 4,000 Bal. 357,000 The adjusted cost of goods sold is the ending balance of $357,000 in the Cost of Goods Sold account. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

185) Leak Enterprises LLC recorded the following transactions for the just completed month. The company had no beginning inventories. (1) Raw materials purchased for cash, $96,000 (2) Direct materials requisitioned for use in production, $69,000 (3) Indirect materials requisitioned for use in production, $22,000 (4) Direct labor wages incurred and paid, $129,000 (5) Indirect labor wages incurred and paid, $16,000 (6) Additional manufacturing overhead costs incurred and paid, $121,000 (7) Manufacturing overhead costs applied to jobs, $163,000 (8) All of the jobs in process were completed. (9) All of the completed jobs were shipped to customers. (10) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Use the following T-accounts to

answer the following questions. Cash Raw Materials Work In Process Finished Goods Manufacturing Overhead Cost of Goods Sold The ending balance in the Raw Materials account is closest to: A) $22,000 B) $5,000 C) $74,000 D) $27,000 --answer: B Explanation: Raw Materials Bal. 0 (1) 96,000 (2) 69,000 (3) 22,000 Bal. 5,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

23) In the Schedule of Cost of Goods Manufactured, Total direct materials = Raw materials used in production - Ending raw materials inventory.

answer: FALSE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

186) Leak Enterprises LLC recorded the following transactions for the just completed month. The company had no beginning inventories. (1) Raw materials purchased for cash, $96,000 (2) Direct materials requisitioned for use in production, $69,000 (3) Indirect materials requisitioned for use in production, $22,000 (4) Direct labor wages incurred and paid, $129,000 (5) Indirect labor wages incurred and paid, $16,000 (6) Additional manufacturing overhead costs incurred and paid, $121,000 (7) Manufacturing overhead costs applied to jobs, $163,000 (8) All of the jobs in process were completed. (9) All of the completed jobs were shipped to customers. (10) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Use the following T-accounts to

answer the following questions. Cash Raw Materials Work In Process Finished Goods Manufacturing Overhead Cost of Goods Sold The manufacturing overhead is: A) $26,000 Underapplied B) $4,000 Underapplied C) $4,000 Overapplied D) $26,000 Overapplied --answer: C Explanation: Cash (1) 96,000 (4) 129,000 (5) 16,000 (6) 121,000 Raw Materials Bal. 0 (1) 96,000 (2) 69,000 (3) 22,000 Bal. 5,000 Work In Process Bal. 0 (2) 69,000 (4) 129,000 (7) 163,000 (8) 361,000 Bal. 0 Finished Goods Bal. 0 (8) 361,000 (9) 361,000 Bal. 0 Manufacturing Overhead (3) 22,000 (7) 163,000 (5) 16,000 (6) 121,000 159,000 163,000 (10) 4,000 The manufacturing overhead is overapplied because the actual manufacturing overhead costs incurred of $159,000 is less than the manufacturing overhead cost applied of $163,000 by $4,000. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

128) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The credits to the Manufacturing Overhead account as a consequence of the raw materials transactions in November total: A) $0 B) $3,000 C) $92,000 D) $95,000 --answer: A Explanation: There were no credits to the Manufacturing overhead account in November, only debits. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

124) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The credits to the Raw Materials account for the month of November total: A) $95,000 B) $78,000 C) $32,000 D) $110,000 --answer: A Explanation: Work in Process $ 92,000 Manufacturing Overhead $ 3,000 Raw Materials $ 95,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

126) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The credits to the Work in Process account as a consequence of the raw materials transactions in November total: A) $78,000 B) $92,000 C) $0 D) $95,000 --answer: C Explanation: There were no credits to the Work in Process account in November, only debits. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

123) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The debits entered in the Raw Materials account during the month of November total: A) $95,000 B) $78,000 C) $32,000 D) $110,000 --answer: B Explanation: Raw Materials $ 78,000 Accounts Payable $ 78,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

127) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The debits to the Manufacturing Overhead account as a consequence of the raw materials transactions in November total: A) $95,000 B) $3,000 C) $0 D) $92,000 --answer: B Explanation: Work in Process $ 92,000 Manufacturing Overhead $ 3,000 Raw Materials $ 95,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

238) Wears Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Finished Goods Bal. 1/1 48,000 Credits ? Debits ? Bal. 12/31 69,000 The Cost of Goods Manufactured for the year was $537,000. Required: What was the Cost of Goods Sold for the year?

answer: Finished goods inventory, 1/1 48,000 Add: Debits (Cost of goods manufactured) 537,000 Goods available for sale 585,000 Deduct: Finished goods inventory, 12/31 69,000 Cost of goods sold 516,000 Alternatively, Finished Goods Bal. 1/1 48,000 Credits (plug) 516,000 Debits (Cost of Goods Manufactured) 537,000 Bal. 12/31 69,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

125) On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000. Prepare journal entries to record these events. Use those journal entries to

answer the following questions: The debits to the Work in Process account as a consequence of the raw materials transactions in November total: A) $78,000 B) $95,000 C) $92,000 D) $0 --answer: C Explanation: Work in Process $ 92,000 Manufacturing Overhead $ 3,000 Raw Materials $ 95,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

254) Rieb 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 3,680 $ 8,760 $ 47,280 $ 59,720 Direct labor 9,840 24,090 130,020 163,950 Manufacturing overhead applied 6,160 10,780 60,060 77,000 Total $ 19,680 $ 43,630 $ 237,360 $ 300,670 Manufacturing overhead for the month was overapplied by $7,000. The company allocates any underapplied or overapplied 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.

answer: Overhead applied in work in process $ 6,160 8 % Overhead applied in finished goods 10,780 14 % Overhead applied in cost of goods sold 60,060 78 % Total overhead applied $ 77,000 100 % Manufacturing Overhead 7,000 Work in Process (8% × $7,000) 560 Finished Goods (14% × $7,000) 980 Cost of Goods Sold (78% × $7,000) 5,460 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

245) Doogan Corporation uses a job-order costing system and has provided the following partially completed summary T-accounts for the just completed period: Work In Process Bal. 23,000 Credits 465,000 Direct materials 87,000 Direct labor 148,000 Overhead applied 212,000 Bal. 5,000 Manufacturing Overhead Debits 246,000 Credits ? Required: Was manufacturing overhead underapplied or overapplied? By how much?

answer: Actual manufacturing overhead incurred (Debits to Manufacturing Overhead) $246,000 Deduct: Manufacturing overhead applied to Work in Process 212,000 Underapplied (overapplied) manufacturing overhead $34,000 Alternatively, Manufacturing Overhead Debits 246,000 Credits 212,000 Bal. 34,000 A debit balance in Manufacturing Overhead means that manufacturing overhead is underapplied by the amount of the balance. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

247) Ellithorpe Corporation has provided the following data concerning last month's operations. Cost of goods manufactured $160,000 Underapplied overhead $5,000 Beginning finished goods inventory $32,000 Ending finished goods inventory $44,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. Required: Determine the adjusted cost of goods sold for the month.

answer: Beginning finished goods inventory $32,000 Add: Cost of goods manufactured 160,000 Cost of goods available for sale 192,000 Deduct: Ending finished goods inventory 44,000 Unadjusted cost of goods sold 148,000 Deduct: Overapplied overhead 0 Add: Underapplied overhead 5,000 Adjusted cost of goods sold $153,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

249) Rochford Corporation has provided the following data concerning last month's operations. Purchases of raw materials $25,000 Indirect materials included in manufacturing overhead $5,000 Direct labor cost $58,000 Manufacturing overhead cost applied to Work in Process $73,000 Beginning Ending Raw materials inventory $11,000 $21,000 Work in process inventory $49,000 $74,000 Required: Determine the cost of goods manufactured for the month.

answer: Direct materials: Beginning raw materials inventory $11,000 Add: Purchases of raw materials 25,000 Total raw materials available 36,000 Deduct: Ending raw materials inventory 21,000 Raw materials used in production 15,000 Deduct: Indirect materials included in manufacturing overhead 5,000 $10,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 73,000 Total manufacturing costs 141,000 Add: Beginning work in process inventory 49,000 190,000 Deduct: Ending work in process inventory 74,000 Cost of goods manufactured $116,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

250) Rodenberger Corporation has provided the following data concerning last month's operations. Purchases of raw materials $31,000 Indirect materials included in manufacturing overhead $6,000 Beginning Ending Raw materials inventory $12,000 $17,000 Required: Determine the direct materials cost for the month.

answer: Direct materials: Beginning raw materials inventory $12,000 Add: Purchases of raw materials 31,000 Total raw materials available 43,000 Deduct: Ending raw materials inventory 17,000 Raw materials used in production 26,000 Deduct: Indirect materials included in manufacturing overhead 6,000 Direct materials $20,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

235) Janeway Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 14,000 Credits ? Debits 124,000 Bal. 12/31 21,000 Required: What was the cost of raw materials requisitioned for use in production during the year?

answer: Raw materials inventory, 1/1 $14,000 Add: Debits (purchases of raw materials) 124,000 Materials available for use 138,000 Deduct: Raw materials inventory, 12/31 21,000 Materials requisitioned for use in production $117,000 Alternatively, Raw Materials Bal. 1/1 14,000 Credits (plug) 117,000 Debits 124,000 Bal. 12/31 21,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

236) Falkenstein Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 14,000 Credits ? Debits 140,000 Bal. 12/31 23,000 Work In Process Bal. 1/1 16,000 Credits 420,000 Direct materials 106,000 Direct labor 12,000 Overhead applied 225,000 Bal. 12/31 ? Required: What was the cost of indirect materials requisitioned for use in production during the year?

answer: Raw materials inventory, 1/1 $14,000 Add: Debits (purchases of raw materials) 140,000 Materials available for use 154,000 Deduct: Raw materials inventory, 12/31 23,000 Materials requisitioned for use in production 131,000 Deduct: Direct materials 106,000 Indirect materials $25,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

256) Stangl 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 1,480 $ 7,410 $ 14,430 $ 23,320 Direct labor 5,280 17,670 34,410 57,360 Manufacturing overhead applied 3,770 8,700 16,530 29,000 Total $ 10,530 $ 33,780 $ 65,370 $ 109,680 Manufacturing overhead for the month was underapplied by $3,000. The company allocates any underapplied or overapplied 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: Determine the cost of work in process, finished goods, and cost of goods sold AFTER allocation of the underapplied or overapplied overhead for the period.

answer: Work In Process Finished Goods Cost of Goods Sold Total Total cost before allocation of underapplied overhead $ 10,530 $ 33,780 $ 65,370 $ 109,680 Allocation percentage based on overhead applied during the month 13 % 30 % 57 % 100 % Allocation of underapplied overhead $ 390 $ 900 1,710 $ 3,000 Total cost after allocation of underapplied overhead $ 10,920 $ 34,680 $ 67,080 $ 112,680 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

239) Overly Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Work in Process Bal. 1/1 16,000 Credits ? Debits 555,000 Bal. 12/31 28,000 Required: What was the cost of completed jobs transferred from Work in Process to Finished Goods during the year?

answer: Work in process inventory, 1/1 16,000 Add: Debits (Additions to work in process) 555,000 571,000 Deduct: Work in process inventory, 12/31 28,000 Cost of completed jobs transferred from Work in Process to Finished Goods 543,000 Alternatively, Work in Process Bal. 1/1 16,000 Credits (plug) 543,000 Debits 555,000 Bal. 12/31 28,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

225) During December, Moulding Corporation incurred $76,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $74,000. Required: Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.

answer: Manufacturing Overhead 76,000 Various accounts 76,000 Work in Process 74,000 Manufacturing Overhead 74,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

242) Eppich Corporation has provided the following data for the most recent month: Raw materials, beginning balance $ 16,000 Work in process, beginning balance $ 31,000 Finished Goods, beginning balance $ 49,000 Transactions: (1) Raw materials purchases $ 80,000 (2) Raw materials used in production (all direct materials) $ 77,000 (3) Direct labor $ 51,000 (4) Manufacturing overhead costs incurred $ 88,000 (5) Manufacturing overhead applied $ 71,000 (6) Cost of units completed and transferred from Work in Process to Finished Goods $ 190,000 (7) Any overapplied or underapplied manufacturing overhead is closed to Cost of Goods Sold ? (8) Finished goods are sold $ 219,000 Required: Complete the following T-accounts by recording the beginning balances and each of the transactions listed above.

answer: Raw Materials Bal 16,000 (2) 77,000 (1) 80,000 Bal 19,000 Work in Process Bal 31,000 (6) 190,000 (2) 77,000 (3) 51,000 (5) 71,000 Bal 40,000 Finished Goods Bal 49,000 (8) 219,000 (6) 190,000 Bal 20,000 Manufacturing Overhead (4) 88,000 (5) 71,000 17,000 (7) 17,000 Bal 0 Cost of Goods Sold (7) 17,000 (8) 219,000 236,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

31) In a job-order costing system, manufacturing overhead applied is recorded as a debit to: A) Raw Materials inventory. B) Finished Goods inventory. C) Work in Process inventory. D) Cost of Goods Sold.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

244) During May, Sharpton Corporation recorded the following: Raw materials, beginning balance $ 18,000 Work in process, beginning balance $ 32,000 Finished Goods, beginning balance $ 56,000 Transactions: (1) Raw materials purchases $ 65,000 (2) Raw materials used in production (all direct materials) $ 73,000 (3) Direct labor $ 74,000 (4) Manufacturing overhead costs incurred $ 72,000 (5) Manufacturing overhead applied $ 89,000 (6) Cost of units completed and transferred from Work in Process to Finished Goods $ 252,000 (7) Any overapplied or underapplied manufacturing overhead is closed to Cost of Goods Sold ? (8) Finished goods are sold $ 288,000 Required: Complete the following T-accounts by recording the beginning balances and each of the transactions listed above.

answer: Raw Materials Bal 18,000 (1) 65,000 (2) 73,000 Bal 10,000 Work in Process Bal 32,000 (2) 73,000 (3) 74,000 (5) 89,000 (6) 252,000 Bal 16,000 Finished Goods Bal 56,000 (6) 252,000 (8) 288,000 Bal 20,000 Manufacturing Overhead (4) 72,000 (5) 89,000 (7) 17,000 17,000 Bal 0 Cost of Goods Sold (8) 288,000 (7) 17,000 271,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

240) Prahm Inc. has provided the following data for August: Raw materials, beginning balance $ 19,000 Work in process, beginning balance $ 33,000 Finished Goods, beginning balance $ 52,000 Transactions: (1) Raw materials purchases $ 67,000 (2) Raw materials used in production (all direct materials) $ 78,000 (3) Direct labor $ 77,000 (4) Manufacturing overhead costs incurred $ 64,000 (5) Manufacturing overhead applied $ 71,000 (6) Cost of units completed and transferred from Work in Process to Finished Goods $ 255,000 (7) Any overapplied or underapplied manufacturing overhead is closed to Cost of Goods Sold ? (8) Finished goods are sold $ 294,000 Required: Complete the following T-accounts by recording the beginning balances and each of the transactions listed above.

answer: Raw Materials Bal 19,000 (2) 78,000 (1) 67,000 Bal 8,000 Work in Process Bal 33,000 (6) 255,000 (2) 78,000 (3) 77,000 (5) 71,000 Bal 4,000 Finished Goods Bal 52,000 (8) 294,000 (6) 255,000 Bal 13,000 Manufacturing Overhead (4) 64,000 (5) 71,000 (7) 7,000 7,000 Bal 0 Cost of Goods Sold (8) 294,000 (7) 7,000 287,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

224) During June, Briganti Corporation purchased $79,000 of raw materials on credit to add to its raw materials inventory. A total of $64,000 of raw materials was requisitioned from the storeroom for use in production. These requisitioned raw materials included $4,000 of indirect materials. Required: Prepare journal entries to record the purchase of materials and their use in production.

answer: Raw Materials 79,000 Accounts Payable 79,000 Work in Process 60,000 Manufacturing Overhead 4,000 Raw Materials 64,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

248) Tondre Corporation has provided the following data concerning last month's operations. Direct materials $24,000 Direct labor $58,000 Manufacturing overhead cost applied to Work in Process $87,000 Overapplied overhead $1,000 Beginning Ending Raw materials inventory $12,000 $17,000 Work in process inventory $50,000 $77,000 Finished goods inventory $28,000 $48,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. Required: a. Determine the cost of goods manufactured for the month. b. Prepare a Schedule of Cost of Goods Sold for the month.

answer: a. Direct materials $24,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 87,000 Total manufacturing costs 169,000 Add: Beginning work in process inventory 50,000 219,000 Deduct: Ending work in process inventory 77,000 Cost of goods manufactured $142,000 b. Beginning finished goods inventory $28,000 Add: Cost of goods manufactured 142,000 Cost of goods available for sale 170,000 Deduct: Ending finished goods inventory 48,000 Unadjusted cost of goods sold 122,000 Deduct: Overapplied overhead 1,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $121,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

243) Alberta Corporation uses a job-order costing system. The following data relate to the just completed month's operations. (1) Direct materials requisitioned for use in production, $170,000 (2) Indirect materials requisitioned for use in production, $11,000 (3) Direct labor wages incurred, $105,000 (4) Indirect labor wages incurred, $103,000 (5) Depreciation recorded on factory equipment, $38,000 (6) Additional manufacturing overhead costs incurred, $63,000 (7) Manufacturing overhead costs applied to jobs, $200,000 (8) Cost of jobs completed and transferred from Work in Process to Finished Goods, $450,000 Required: a. Where appropriate, post the above transactions to the Work in Process and Manufacturing Overhead T-accounts below. Work In Process Bal. $35,000 Manufacturing Overhead b. Determine the underapplied or overapplied overhead for the month.

answer: a. Work In Process Bal. 35,000 (8) 450,000 (1) 170,000 (3) 105,000 (6) 200,000 Bal. 60,000 Manufacturing Overhead (2) 11,000 (7) 200,000 (4) 103,000 (5) 38,000 (6) 63,000 215,000 200,000 Bal. 15,000 b. The overhead is $15,000 underapplied because the actual manufacturing overhead cost incurred of $215,000 exceeds the manufacturing overhead applied of $200,000 by $15,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

241) Easterling Corporation uses a job-order costing system. The following data relate to the just completed month's operations. Beginning balance in Work in Process $43,000 (1) Raw materials purchased on account $172,000 (2) Direct materials requisitioned for use in production $125,000 (3) Indirect materials requisitioned for use in production $19,000 (4) Direct labor wages incurred $78,000 (5) Indirect labor wages incurred $102,000 (6) Depreciation recorded on factory equipment $36,000 (7) Additional manufacturing overhead costs incurred $77,000 (8) Manufacturing overhead costs applied to jobs $231,000 (9) Cost of jobs completed and transferred from Work in Process to Finished Goods $402,000 Required: a. Where appropriate, post the above transactions to the Work in Process and Manufacturing Overhead T-accounts below. Work In Process Manufacturing Overhead b. Determine the underapplied or overapplied overhead for the month.

answer: a. Work In Process Bal. 43,000 (9) 402,000 (2) 125,000 (4) 78,000 (8) 231,000 Bal. 75,000 Manufacturing Overhead (3) 19,000 (8) 231,000 (5) 102,000 (6) 36,000 (7) 77,000 234,000 231,000 Bal. 3,000 b. The overhead is $3,000 underapplied because the actual manufacturing overhead cost incurred of $234,000 exceeds the manufacturing overhead applied of $231,000 by $3,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

252) Baab Corporation is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials $ 14,000 $ 22,000 Work in process $ 27,000 $ 9,000 Finished Goods $ 62,000 $ 77,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine-hours and incur $231,000 in manufacturing overhead cost. The following transactions were recorded for the year: • Raw materials were purchased, $315,000. • Raw materials were requisitioned for use in production, $307,000 ($281,000 direct and $26,000 indirect). • The following employee costs were incurred: direct labor, $377,000; indirect labor, $96,000; and administrative salaries, $172,000. • Selling costs, $147,000. • Factory utility costs, $10,000. • Depreciation for the year was $127,000 of which $120,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities. • Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,000 machine-hours. • Sales for the year totaled $1,253,000. Required: a. Prepare a schedule of cost of goods manufactured. b. Was the overhead underapplied or overapplied? By how much? c. Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold.

answer: a. Schedule of cost of goods manufactured Estimated total manufacturing overhead (a) $ 231,000 Estimated total machine-hours (b) 33,000 Predetermined overhead rate (a) ÷ (b) $ 7.00 Actual total machine-hours (a) 34,000 Predetermined overhead rate (b) $ 7.00 Overhead applied (a) × (b) $ 238,000 Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $ 14,000 Add: Purchases of raw materials 315,000 Total raw materials available 329,000 Deduct: Ending raw materials inventory 22,000 Raw materials used in production 307,000 Deduct: Indirect materials included in manufacturing overhead 26,000 $ 281,000 Direct labor 377,000 Manufacturing overhead cost applied to work in process 238,000 Total manufacturing costs 896,000 Add: Beginning work in process inventory 27,000 923,000 Deduct: Ending work in process inventory 9,000 Cost of goods manufactured $ 914,000 b. Overhead underapplied or overapplied Actual manufacturing overhead cost incurred: Indirect materials $ 26,000 Indirect labor 96,000 Factory utilities 10,000 Factory depreciation 120,000 Manufacturing overhead cost incurred 252,000 Manufacturing overhead applied 238,000 Underapplied overhead $ 14,000 c. Income Statement Cost of Goods Sold Beginning finished goods inventory $ 62,000 Add: Cost of goods manufactured 914,000 Cost of goods available for sale 976,000 Deduct: Ending finished goods inventory 77,000 Unadjusted cost of goods sold 899,000 Add: Underapplied overhead 14,000 Adjusted cost of goods sold $ 913,000 Income Statement Sales $ 1,253,000 Cost of goods sold (adjusted) 913,000 Gross margin 340,000 Selling and administrative expenses: Administrative salaries $ 172,000 Selling costs 147,000 Depreciation 7,000 326,000 Net operating income $ 14,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

234) Dotsero Technology, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine-hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year: Department A Department B Machine-hours 70,000 19,000 Direct labor-hours 30,000 60,000 Direct materials $195,000 $282,000 Direct labor $260,000 $520,000 Manufacturing overhead $420,000 $705,000 Job 243 entered into production an April 1 and was completed on May 12. The company's cost records show the following information about the job: Department A Department B Machine-hours 250 60 Direct labor-hours 70 120 Direct materials $840 $1,100 Direct labor $610 $880 At the end of the year, the records of Dotsero showed the following actual cost and operating data for all jobs worked on during the year: Department A Department B Machine-hours 61,000 20,000 Direct labor-hours 28,000 66,000 Direct materials $156,000 $284,000 Manufacturing overhead $385,000 $705,000 Required: a. Compute the predetermined overhead rates for Department A and Department B. b. Compute the total overhead cost applied to Job 243. c. Compute the amount of underapplied or overapplied overhead in each department at the end of the current year.

answer: a. Department A predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $420,000 ÷ 70,000 machine-hours = $6.00 per machine-hour Department B predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $705,000 ÷ /$282,000 = 250% of direct materials cost b. Overhead applied to Job 243: Department A: $6.00 per machine-hour × 250 machine-hours $1,500 Department B: 2.5 × $1,100 $2,750 Total overhead applied to Job 243 $4,250 c. Department A Department B Manufacturing overhead incurred $385,000 $705,000 Manufacturing overhead applied: 61,000 × $6.00 366,000 $284,000 × 250% 710,000 Underapplied (overapplied) overhead $19,000 $(5,000) Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

233) Fossil Manufacturing uses a predetermined overhead rate of $17.80 per direct labor-hour. This predetermined rate was based on 11,000 estimated direct-labor-hours and $195,800 of estimated total manufacturing overhead. The company incurred actual manufacturing overhead costs of $194,000 and 10,500 direct labor-hours. Required: a. Determine the amount of underapplied or overapplied manufacturing overhead for the period. b. Assuming that the company closed manufacturing overhead to cost of goods sold, make the journal entry to close manufacturing overhead. c. What is the effect of this entry on the company's gross margin?

answer: a. Overhead over or underapplied Actual manufacturing overhead incurred $194,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $17.80 per direct labor-hour Actual total amount of the allocation base (b) 10,500 direct labor-hours Manufacturing overhead applied (a) × (b) $186,900 Underapplied (overapplied) manufacturing overhead $7,100 Underapplied b. Cost of Goods Sold 7,100 Manufacturing Overhead 7,100 c. Underapplied overhead increases the cost of goods sold and decreases gross margin. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

117) Mackinaw Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 17,000 actual direct labor-hours and incurred $145,000 of actual manufacturing overhead cost. They had estimated at the beginning of the year that 16,000 direct labor-hours would be worked and $144,000 of manufacturing overhead costs incurred. The Corporation had calculated a predetermined overhead rate of $9 per direct labor-hour. The Corporation's manufacturing overhead for the year was: A) overapplied by $8,000 B) underapplied by $8,000 C) overapplied by $1,000 D) underapplied by $1,000

answer: A Explanation: Actual manufacturing overhead incurred $ 145,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 9 per direct labor-hour Actual total amount of the allocation base (b) 17,000 direct labor-hours Manufacturing overhead applied (a) × (b) $ 153,000 Underapplied (overapplied) manufacturing overhead $ (8,000 ) Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

253) The following cost data relate to the manufacturing activities of the Kanaba Corporation last year: Manufacturing overhead costs: Property taxes $1,500 Utilities, factory 2,500 Indirect labor 5,000 Depreciation, factory 12,000 Insurance, factory 3,000 Total $24,000 Other costs incurred: Purchases of direct materials $16,000 Direct labor cost $20,000 Inventories: Direct materials, January 1 $4,000 Direct materials, December 31 $3,500 Work in process, January 1 $3,000 Work in process, December 31 $3,750 The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The rate last year was $5.00 per machine-hour; a total of 5,000 machine-hours were recorded for the year. Required: a. Compute the amount of underapplied or overapplied overhead cost for the year. b. Prepare a schedule of Cost of Goods Manufactured for the year.

answer: a. Overhead over or underapplied Actual manufacturing overhead incurred $24,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $5.00 per machine-hour Actual total amount of the allocation base (b) 5,000 machine-hours Manufacturing overhead applied (a) × (b) 25,000 Underapplied (overapplied) manufacturing overhead $(1,000) Overapplied b. Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $ 4,000 Add: Purchases of raw materials 16,000 Total raw materials available 20,000 Deduct: Ending raw materials inventory 3,500 Raw materials used in production 16,500 Deduct: Indirect materials included in manufacturing overhead 0 $16,500 Direct labor 20,000 Manufacturing overhead cost applied to work in process 25,000 Total manufacturing costs 61,500 Add: Beginning work in process inventory 3,000 64,500 Deduct: Ending work in process inventory 3,750 Cost of goods manufactured $60,750 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

227) The Collins Corporation uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: manufacturing overhead cost, $200,000; direct materials cost, $160,000. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials were purchased, $86,000. b. Raw materials were requisitioned for use in production (all direct materials), $98,000. c. Utility costs were incurred in the factory, $15,000. d. Salaries and wages were incurred as follows: Direct labor $175,000 Indirect labor $70,000 Selling and administrative salaries $125,000 e. Maintenance costs incurred in the factory, $15,000. f. Advertising costs incurred, $89,000. g. Depreciation recorded for the year, $80,000 (80% relates to factory assets and the remainder relates to selling, general, and administrative assets). h. Rental cost incurred on buildings, $70,000, (75% of the space is occupied by the factory, and 25% is occupied by sales and administration). i. Miscellaneous selling, general, and administrative costs incurred, $11,000. j. Manufacturing overhead cost was applied to jobs as per company policy. k. Cost of goods manufactured for the year, $500,000. l. Sales for the year totaled $1,000,000. These goods cost $600,000 to produce. Required: Prepare journal entries for each of the above transactions. Assume that all transactions with external suppliers, employees, and customers were conducted in cash.

answer: a. Raw Materials 86,000 Cash 86,000 b. Work in Process 98,000 Raw Materials 98,000 c. Manufacturing Overhead 15,000 Cash 15,000 d. Work in Process 175,000 Manufacturing Overhead 70,000 Selling and Administrative Expense 125,000 Cash 370,000 e. Manufacturing Overhead 15,000 Cash 15,000 f. Advertising Expense 89,000 Cash 89,000 g. Manufacturing Overhead 64,000 Depreciation Expense 16,000 Accumulated Depreciation 80,000 h. Manufacturing Overhead (0.75 × $70,000) 52,500 Rent Expense (0.25 × $70,000) 17,500 Cash 70,000 i. Selling and Administrative Expense 11,000 Cash 11,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $200,000 ÷ $160,000 = 125% of direct materials cost Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Overhead applied = 1.25 × $98,000 = $122,500 j. Work in Process 122,500 Manufacturing Overhead 122,500 k. Finished Goods 500,000 Work in Process 500,000 l. Cash 1,000,000 Sales 1,000,000 Cost of Goods Sold 600,000 Finished Goods 600,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

223) The Simkins Corporation uses a job-order costing system. The following activities took place during the month of May: a. Raw materials purchased $40,000 b. Raw materials (all direct) used in production $35,000 c. Salaries and wages costs: Direct labor cost $60,000 Indirect labor cost $30,000 Sales salaries $25,000 d. Factory utility costs $15,000 e. Depreciation on factory equipment $50,000 f. Advertising expense $80,000 g. Manufacturing overhead is applied at the predetermined rate of 150% of direct labor cost. h. Cost of Goods Manufactured for the month $180,000 i. Cost of Goods Sold for the month $150,000 Required: Prepare journal entries to record the information given above. Key your entries by the letters a through i.

answer: a. Raw materials inventory 40,000 Accounts payable 40,000 b. Work in process 35,000 Raw materials inventory 35,000 c. Work in process 60,000 Manufacturing overhead 30,000 Sales salaries expense 25,000 Wages and salaries payable 115,000 d. Manufacturing overhead 15,000 Accounts payable 15,000 e. Manufacturing overhead 50,000 Accumulated depreciation 50,000 f. Advertising expense 80,000 Accounts payable 80,000 g. Work in process 90,000 Manufacturing overhead 90,000 $60,000 × 150% = $90,000 h. Finished goods 180,000 Work in process 180,000 i. Cost of goods sold 150,000 Finished goods 150,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

246) Shantz Corporation has provided the following data concerning last month's operations. Purchases of raw materials $32,000 Indirect materials included in manufacturing overhead $5,000 Direct labor cost $58,000 Manufacturing overhead applied to Work in Process $99,000 Overapplied overhead $2,000 Beginning Ending Raw materials inventory $12,000 $16,000 Work in process inventory $48,000 $53,000 Finished goods inventory $41,000 $47,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. Required: a. Prepare a Schedule of Cost of Goods Manufactured for the month. b. Prepare a Schedule of Cost of Goods Sold for the month.

answer: a. Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $12,000 Add: Purchases of raw materials 32,000 Total raw materials available 44,000 Deduct: Ending raw materials inventory 16,000 Raw materials used in production 28,000 Deduct: Indirect materials included in manufacturing overhead 5,000 $23,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 99,000 Total manufacturing costs 180,000 Add: Beginning work in process inventory 48,000 228,000 Deduct: Ending work in process inventory 53,000 Cost of goods manufactured $175,000 b. Schedule of Cost of Goods Sold Beginning finished goods inventory $41,000 Add: Cost of goods manufactured 175,000 Cost of goods available for sale 216,000 Deduct: Ending finished goods inventory 47,000 Unadjusted cost of goods sold 169,000 Deduct: Overapplied overhead 2,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $167,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

237) Sefcovic Enterprises LLC recorded the following transactions for the just completed month. The company had no beginning inventories. (1) Raw materials purchased for cash, $110,000 (2) Direct materials requisitioned for use in production, $79,000 (3) Indirect materials requisitioned for use in production, $15,000 (4) Direct labor wages incurred and paid, $125,000 (5) Indirect labor wages incurred and paid, $22,000 (6) Additional manufacturing overhead costs incurred and paid, $134,000 (7) Manufacturing overhead costs applied to jobs, $125,000 (8) All of the jobs in process were completed. (9) All of the completed jobs were shipped to customers. (10) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Required: a. Post the above transactions to the following T-accounts: Cash Raw Materials Work In Process Finished Goods Manufacturing Overhead Cost of Goods Sold b. Determine the adjusted cost of goods sold for the month.

answer: a. T-accounts Cash (1) 110,000 (4) 125,000 (5) 22,000 (6) 134,000 Raw Materials Bal. 0 (1) 110,000 (2) 79,000 (3) 15,000 Bal. 16,000 Work In Process Bal. 0 (2) 79,000 (4) 125,000 (7) 125,000 (8) 329,000 Bal. 0 Finished Goods Bal. 0 (8) 329,000 (9) 329,000 Bal. 0 Manufacturing Overhead (3) 15,000 (7) 125,000 (5) 22,000 (6) 134,000 171,000 125,000 (10) 46,000 Cost of Goods Sold (9) 329,000 (10) 46,000 Bal. 375,000 b. The adjusted cost of goods sold is the ending balance of $375,000 in the Cost of Goods Sold account. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Critical Thinking;

228) Mcie Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $33,000 Work in process $20,000 Finished goods $35,000 Estimated total manufacturing overhead at the beginning of the year $567,000 Estimated direct labor-hours at the beginning of the year 36,000 direct labor-hours Results of operations: Raw materials purchased on account $497,000 Raw materials (all direct) requisitioned for use in production $452,000 Direct labor cost $591,000 Actual direct labor-hours 45,000 direct labor-hours Manufacturing overhead: Indirect labor cost $124,000 Other manufacturing overhead costs incurred $598,000 Cost of goods manufactured $1,557,000 Required: a. What is the ending balance in Raw Materials? b. What is the ending balance in Work in Process?

answer: a. The ending balance in Raw Materials is computed as follows: *33,000 + 497,000 − 452,000 = 78,000 b. The ending balance in Work in Process is computed as follows: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $567,000 ÷ 36,000 direct labor-hours = $15.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $15.75 per direct labor-hour × 45,000 direct labor-hours = $708,750 *20,000 + (452,000 + 591,000 + 708,750) − 1,557,000 = 20,000 + (1,751,750) − 1,557,000 = 214,750 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

229) Kahanaoi Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $38,000 Work in process $16,000 Finished goods $39,000 Estimated total manufacturing overhead at the beginning of the year $708,000 Estimated direct labor-hours at the beginning of the year 48,000 direct labor-hours Results of operations: Raw materials purchased on account $453,000 Raw materials (all direct) requisitioned for use in production $417,000 Direct labor cost $545,000 Actual direct labor-hours 46,000 direct labor-hours Manufacturing overhead: Indirect labor cost $151,000 Other manufacturing overhead costs incurred $449,000 Selling and administrative: Selling and administrative salaries $193,000 Other selling and administrative expenses $355,000 Cost of goods manufactured $1,568,000 Sales revenue $2,489,000 Cost of goods sold (unadjusted) $1,498,000 Required: a. What is the journal entry to record raw materials used in production? b. What is the ending balance in Raw Materials? c. What is the journal entry to record the direct and indirect labor costs incurred during the year? d. What is the total amount of manufacturing overhead applied to production during the year? e. What is the total manufacturing cost added to Work in Process during the year? f. What is the journal entry to record the transfer of completed goods from Work in Process to Finished Goods? g. What is the ending balance in Work in Process? h. Is manufacturing overhead overapplied or underapplied for the year? By how much? i. What is the cost of goods available for sale during the year? j. What is the journal entry to record the unadjusted cost of goods sold? k. What is the adjusted cost of goods sold for the year? l. What is the gross margin for the year? m. What is the net operating income for the year?

answer: a. The journal entry to record the raw materials used in production is: Work in Process 417,000 Raw Materials 417,000 b. The ending balance in Raw Materials is computed as follows: *38,000 + 453,000 − 417,000 = 74,000 c. The journal entry to record the direct and indirect labor costs is: Work in Process 545,000 Manufacturing Overhead 151,000 Wages Payable or Cash 696,000 d. The total manufacturing overhead applied to production is computed as follows: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $708,000 ÷ 48,000 direct labor-hours = $14.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $14.75 per direct labor-hour × 46,000 direct labor-hours = $678,500 e. The total manufacturing cost added to work in process is: Direct materials $417,000 Direct labor 545,000 Manufacturing overhead applied 678,500 Total manufacturing cost $1,640,500 f. The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: Finished Goods 1,568,000 Work in Process 1,568,000 g. The ending balance in Work in Process is computed as follows: *16,000 + (417,000 + 545,000 + 678,500) − 1,568,000 = 16,000 + (1,640,500) − 1,568,000 = 88,500 h. The overapplied or underapplied overhead is computed as follows: Actual manufacturing overhead incurred ($151,000 + $449,000) $600,000 Manufacturing overhead applied to Work in Process 678,500 Underapplied (overapplied) manufacturing overhead $(78,500) i. The cost of goods available for sale is computed as follows: Beginning finished goods inventory $39,000 Add: Cost of goods manufactured 1,568,000 Cost of goods available for sale $1,607,000 j. The journal entry to record the unadjusted Cost of Goods Sold is: Cost of Goods Sold 1,498,000 Finished Goods 1,498,000 k. The adjusted Cost of Goods Sold for the year is computed as follows: Unadjusted cost of goods sold $1,498,000 Underapplied (overaplied) overhead (78,500) Adjusted cost of goods sold $1,419,500 l. The gross margin is: Sales $2,489,000 Cost of goods sold (adjusted) 1,419,500 Gross margin $1,069,500 m. The net operating income is: Sales $2,489,000 Cost of goods sold (adjusted) 1,419,500 Gross margin 1,069,500 Selling and administrative expenses: Selling and administrative salaries 193,000 Other selling and administrative expenses 355,000 548,000 Net operating income $521,500 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

226) Buckovitch Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $482,000 Raw materials (all direct) requisitioned for use in production $478,000 Direct labor cost $576,000 Manufacturing overhead: Indirect labor cost $136,000 Other manufacturing overhead costs incurred $414,000 Cost of goods manufactured $1,565,000 Cost of goods sold (unadjusted) $1,513,000 Required: a. What is the journal entry to record raw materials used in production? b. What is the journal entry to record the direct and indirect labor costs incurred during the year? c. What is the journal entry to record the transfer of completed goods from Work in Process to Finished Goods? d. What is the journal entry to record the unadjusted cost of goods sold?

answer: a. The journal entry to record the raw materials used in production is: Work in Process 478,000 Raw Materials 478,000 b. The journal entry to record the direct and indirect labor costs is: Work in Process 576,000 Manufacturing Overhead 136,000 Wages Payable or Cash 712,000 c. The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: Finished Goods 1,565,000 Work in Process 1,565,000 d. The journal entry to record the unadjusted Cost of Goods Sold is: Cost of Goods Sold 1,513,000 Finished Goods 1,513,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

120) Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred $ 84,000 Actual direct labor-hours worked 27,000 The overapplied or underapplied manufacturing overhead for the year was: A) $3,000 underapplied B) $3,000 overapplied C) $12,000 underapplied D) $12,000 overapplied

answer: A Explanation: Actual manufacturing overhead incurred $ 84,000 Manufacturing overhead applied to Work in Process ($3 per direct labor-hour × 27,000 direct labor-hours) 81,000 Underapplied (overapplied) manufacturing overhead $ 3,000 Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

231) Blasi Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $33,000 Estimated total manufacturing overhead at the beginning of the year $540,000 Estimated direct labor-hours at the beginning of the year 40,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $462,000 Direct labor cost $567,000 Actual direct labor-hours 39,000 direct labor-hours Manufacturing overhead: Indirect labor cost $121,000 Other manufacturing overhead costs incurred $451,000 Selling and administrative: Selling and administrative salaries $263,000 Other selling and administrative expenses $299,000 Cost of goods manufactured $1,371,000 Sales revenue $3,298,000 Cost of goods sold (unadjusted) $1,302,000 Required: a. What is the total manufacturing cost added to Work in Process during the year? b. What is the cost of goods available for sale during the year? c. What is the net operating income for the year?

answer: a. The total manufacturing cost added to work in process is computed as follows: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $540,000 ÷ 40,000 direct labor-hours = $13.50 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.50 per direct labor-hour × 39,000 direct labor-hours = $526,500 Direct materials $462,000 Direct labor 567,000 Manufacturing overhead applied 526,500 Total manufacturing cost $1,555,500 b. The cost of goods available for sale is computed as follows: Beginning finished goods inventory $33,000 Add: Cost of goods manufactured 1,371,000 Cost of goods available for sale $1,404,000 c. The net operating income is computed as follows: Actual manufacturing overhead incurred ($121,000 + $451,000) $572,000 Manufacturing overhead applied to Work in Process 526,500 Underapplied (overapplied) manufacturing overhead $45,500 Unadjusted cost of goods sold $1,302,000 Underapplied (overaplied) overhead 45,500 Adjusted cost of goods sold $1,347,500 Sales $3,298,000 Cost of goods sold (adjusted) 1,347,500 Gross margin 1,950,500 Selling and administrative expenses: Selling and administrative salaries 263,000 Other selling and administrative expenses 299,000 562,000 Net operating income $1,388,500 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

230) Molin Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $638,750 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Actual direct labor-hours 40,000 direct labor-hours Manufacturing overhead: Indirect labor cost $166,000 Other manufacturing overhead costs incurred $595,000 Cost of goods sold (unadjusted) $1,570,000 Required: a. What is the total amount of manufacturing overhead applied to production during the year? b. Is manufacturing overhead overapplied or underapplied for the year? By how much? c. What is the adjusted cost of goods sold for the year?

answer: a. The total manufacturing overhead applied to production is computed as follows: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $638,750 ÷ 35,000 direct labor-hours = $18.25 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $18.25 per direct labor-hour × 40,000 direct labor-hours = $730,000 b. The overapplied or underapplied overhead is computed as follows: Actual manufacturing overhead incurred ($166,000 + $595,000) $761,000 Manufacturing overhead applied to Work in Process 730,000 Underapplied (overapplied) manufacturing overhead $31,000 c. The adjusted Cost of Goods Sold for the year is computed as follows: Unadjusted cost of goods sold $1,570,000 Underapplied (overaplied) overhead 31,000 Adjusted cost of goods sold $1,601,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

232) Gonzalez, Inc. manufactures stereo speakers in two factories; one in Vandalia, Illinois and another in Modesto, California. The Vandalia factory uses direct labor cost (DL$) for its overhead rate and the Modesto factory uses machine-hours (MHs) for its overhead rate. Information related to both plants for last year is presented below: Vandalia factory Modesto factory Estimated total manufacturing overhead cost $1,000,000 $1,600,000 Estimated total amount of allocation base (a)______________ 200,000 MHs Predetermined overhead rate $10 per DL$ (d)_____________ Actual amount of allocation base (b)______________ 190,000 MHs Actual manufacturing overhead $1,092,500 $1,472,500 Applied manufacturing overhead $1,010,000 (e)_____________ Under or (over)applied overhead (c) ______________ (f)_____________ Required: Fill in the lettered blanks above. SHOW YOUR CALCULATIONS.

answer: (a) Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base $10 per DL$ = $1,000,000 ÷ Estimated total amount of the allocation base Estimated total amount of the allocation base = $1,000,000 ÷ $10 per DL$ = $100,000 (b) Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $1,010,000 = $10 per DL$ × Amount of the allocation base incurred Amount of the allocation base incurred = $1,010,000 ÷ $10 per DL$ = $101,000 (c) Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied = $1,092,500 - $1,010,000 = $82,500 underapplied (d) Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $1,600,000 ÷ 200,000 MHs = $8 per MH (e) Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $8 per MH × 190,000 MHs = $1,520,000 (f) Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied = $1,472,500 - $1,520,000 = -$47,500 overapplied; Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

198) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $136,000 B) $141,000 C) $144,000 D) $185,000

answer: A Explanation: Beginning finished goods inventory $ 41,000 Add: Cost of goods manufactured 144,000 Cost of goods available for sale 185,000 Deduct: Ending finished goods inventory 49,000 Unadjusted cost of goods sold $ 136,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

188) Gurtner Corporation has provided the following data concerning last month's operations. Cost of goods manufactured $ 170,000 Underapplied overhead $ 4,000 Beginning Ending Finished goods inventory $ 33,000 $ 40,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $203,000 B) $170,000 C) $167,000 D) $163,000

answer: A Explanation: Beginning finished goods inventory $ 33,000 Add: Cost of goods manufactured 170,000 Cost of goods available for sale $ 203,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

200) Vogel Corporation's cost of goods manufactured last month was $136,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $48,000. Overhead was overapplied by $6,000. Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $171,000 B) $117,000 C) $123,000 D) $136,000

answer: A Explanation: Beginning finished goods inventory $ 35,000 Add: Cost of goods manufactured 136,000 Cost of goods available for sale $ 171,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

209) Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Additional information: Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for July is: A) $203,000 B) $215,000 C) $204,000 D) $216,000

answer: A Explanation: Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

91) Holmstrom Corporation has provided the following data concerning last month's operations. Direct materials $ 14,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 79,000 Beginning Ending Work in process inventory $ 47,000 $ 53,000 Finished goods inventory $ 41,000 $ 42,000 How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $186,000 B) $145,000 C) $144,000 D) $138,000

answer: A Explanation: Direct materials $ 14,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 79,000 Total manufacturing costs 151,000 Add: Beginning work in process inventory 47,000 198,000 Deduct: Ending work in process inventory 53,000 Cost of goods manufactured $ 145,000 Beginning finished goods inventory $ 41,000 Add: Cost of goods manufactured 145,000 Cost of goods available for sale $ 186,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

93) Haver Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 32,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 84,000 Beginning Ending Raw materials inventory $ 10,000 $ 16,000 Work in process inventory $ 58,000 $ 74,000 Finished goods inventory $ 32,000 $ 49,000 How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $180,000 B) $148,000 C) $131,000 D) $134,000

answer: A Explanation: Direct materials: Beginning raw materials inventory $ 10,000 Add: Purchases of raw materials 32,000 Total raw materials available 42,000 Deduct: Ending raw materials inventory 16,000 Raw materials used in production 26,000 Deduct: Indirect materials included in manufacturing overhead 4,000 $ 22,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 84,000 Total manufacturing costs 164,000 Add: Beginning work in process inventory 58,000 222,000 Deduct: Ending work in process inventory 74,000 Cost of goods manufactured $ 148,000 Beginning finished goods inventory $ 32,000 Add: Cost of goods manufactured 148,000 Cost of goods available for sale $ 180,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

87) Bocchini Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 35,000 Indirect materials included in manufacturing overhead $ 6,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 84,000 Beginning Ending Raw materials inventory $ 14,000 $ 19,000 Work in process inventory $ 55,000 $ 58,000 Finished goods inventory $ 39,000 $ 37,000 How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $165,000 B) $163,000 C) $169,000 D) $202,000

answer: A Explanation: Direct materials: Beginning raw materials inventory $ 14,000 Add: Purchases of raw materials 35,000 Total raw materials available 49,000 Deduct: Ending raw materials inventory 19,000 Raw materials used in production 30,000 Deduct: Indirect materials included in manufacturing overhead 6,000 $ 24,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 84,000 Total manufacturing costs 166,000 Add: Beginning work in process inventory 55,000 221,000 Deduct: Ending work in process inventory 58,000 Cost of goods manufactured $ 163,000 Beginning finished goods inventory $ 39,000 Add: Cost of goods manufactured 163,000 Cost of goods available for sale 202,000 Deduct: Ending finished goods inventory 37,000 Unadjusted cost of goods sold $ 165,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

208) Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Additional information: Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The direct materials cost for July is: A) $55,000 B) $69,000 C) $63,000 D) $66,000

answer: A Explanation: Raw materials inventory, beginning $ 27,000 Add: Purchases of raw materials 66,000 Total raw materials available 93,000 Deduct: Raw materials inventory, ending 30,000 Raw materials used in production 63,000 Deduct: Indirect materials included in manufacturing overhead 8,000 Direct materials $ 55,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

130) During March, Pendergraph Corporation incurred $60,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $62,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: A) credit to Manufacturing Overhead of $62,000 B) debit to Work in Process of $60,000 C) credit to Work in Process of $60,000 D) debit to Manufacturing Overhead of $62,000

answer: A Explanation: Work in Process $ 62,000 Manufacturing Overhead $ 62,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

48) Gallon Corporation had $24,000 of raw materials on hand on April 1. During the month, the Corporation purchased an additional $52,000 of raw materials. During April, $62,000 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 $2,000. The debits to the Work in Process account as a consequence of the raw materials transactions in April total: A) $60,000 B) $62,000 C) $0 D) $52,000

answer: A Explanation: Work in Process 60,000 Manufacturing Overhead 2,000 Raw Materials 62,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

59) During June, Buttrey Corporation incurred $67,000 of direct labor costs and $7,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: A) debit to Work in Process of $67,000. B) credit to Work in Process of $74,000. C) debit to Work in Process of $74,000. D) credit to Work in Process of $67,000.

answer: A Explanation: Work in Process 67,000 Manufacturing Overhead 7,000 Salaries and Wages Payable 74,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

58) In October, Raddatz Inc. incurred $73,000 of direct labor costs and $6,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: A) debit to Manufacturing Overhead of $6,000 B) debit to Work in Process of $79,000 C) credit to Manufacturing Overhead of $6,000 D) credit to Work in Process of $79,000

answer: A Explanation: Work in Process 73,000 Manufacturing Overhead 6,000 Salaries and Wages Payable 79,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

46) During July at Loeb Corporation, $83,000 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 $4,000. The journal entry to record the requisition from the storeroom would include a: A) debit to Work in Process of $79,000 B) debit to Work in Process of $83,000 C) credit to Manufacturing Overhead of $4,000 D) debit to Raw Materials of $83,000

answer: A Explanation: Work in Process 79,000 Manufacturing Overhead 4,000 Raw Materials 83,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

171) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (2) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The ending Work in Process account balance would be: A) $13,000 B) $75,000 C) $20,000 D) $64,000

answer: A Explanation: Work In Process Bal 11,000 (7) 62,000 (2) 15,000 (4) 18,000 (6) 31,000 75,000 62,000 13,000 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

70) Fisher Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information about Fisher Corporation's Work in Process inventory account has been provided for the month of May: May 1 balance $ 26,000 Debits During May: Direct Materials $ 40,000 Direct Labor $ 50,000 Manufacturing Overhead $ 37,500 During the month, Fisher Corporation's Work in Process inventory account was credited for $120,500, which represented the Cost of Goods Manufactured for the month. Only one job remained in process on May 31; this job had been charged with $9,600 of applied overhead cost. The amount of direct materials cost in the unfinished job would be: (Round your intermediate calculations to 2 decimal places.) A) $10,600 B) $16,700 C) $12,800 D) $23,400

answer: A Explanation: Work In Process Bal 26,000 120,500 40,000 50,000 37,500 33,000 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $37,500 = Predetermined overhead rate × $50,000 Predetermined overhead rate = $37,500 ÷ $50,000 = 0.75 $9,600 = 0.75 × Amount of the allocation base incurred by the job Amount of the allocation base incurred by the job = $9,600 ÷ 0.75 = $12,800 Work In Process inventory = Direct materials + Direct labor + Manufacturing overhead $33,000 = Direct materials + $12,800 + $9,600 Direct materials = $33,000 - ($12,800 + $9,600) = 10,600 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

35) Refer to the T-account below: Raw Materials Bal. 15,000 (9) 75,000 (5) 85,000 Bal. 25,000 Entry (5) could represent which of the following? A) Payments for raw materials. B) Requisitions of raw materials to be used in production. C) Purchases of raw materials. D) Overhead cost applied to Work in Process.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

218) Castagnola Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 880 $ 5,500 $ 23,100 $ 29,480 Direct labor 4,100 17,600 73,920 95,620 Manufacturing overhead applied 2,460 7,380 31,160 41,000 Total $ 7,440 $ 30,480 $ 128,180 $ 166,100 Manufacturing overhead for the month was overapplied 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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following: A) credit to Cost of Goods Sold of $760 B) debit to Cost of Goods Sold of $128,180 C) credit to Cost of Goods Sold of $128,180 D) debit to Cost of Goods Sold of $760

answer: A Explanation: Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. Manufacturing Overhead 1,000 Work in Process (6% × $1,000) 60 Finished Goods (18% × $1,000) 180 Cost of Goods Sold (76% × $1,000) 760 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

220) Stockman Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 4,070 $ 15,680 $ 42,080 $ 61,830 Direct labor 7,760 27,440 73,640 108,840 Manufacturing overhead applied 5,130 14,250 37,620 57,000 Total $ 16,960 $ 57,370 $ 153,340 $ 227,670 Manufacturing overhead for the month was overapplied 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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following: A) credit to Finished Goods of $250 B) credit to Finished Goods of $57,370 C) debit to Finished Goods of $250 D) debit to Finished Goods of $57,370

answer: A Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. Manufacturing Overhead 1,000 Work in Process (9% × $1,000) 90 Finished Goods (25% × $1,000) 250 Cost of Goods Sold (66% × $1,000) 660 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

215) Reith Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 1,850 $ 10,440 $ 58,560 $ 70,850 Direct labor 3,510 22,620 126,880 153,010 Manufacturing overhead applied 1,560 7,800 42,640 52,000 Total $ 6,920 $ 40,860 $ 228,080 $ 275,860 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 cost of goods sold for November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $224,800 B) $231,360 C) $224,080 D) $232,080

answer: A Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Cost of goods sold for November after allocation of overapplied manufacturing overhead = $228,080 − [($42,640/$52,000) × $4,000] = $228,080 − (82% × $4,000) = $224,800 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

214) Centore Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 650 $ 7,590 $ 24,860 $ 33,100 Direct labor 2,180 20,700 67,800 90,680 Manufacturing overhead applied 930 7,130 22,940 31,000 Total $ 3,760 $ 35,420 $ 115,600 $ 154,780 Manufacturing overhead for the month was underapplied 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. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for June would include the following: A) debit to Cost of Goods Sold of $2,220 B) debit to Cost of Goods Sold of $115,600 C) credit to Cost of Goods Sold of $2,220 D) credit to Cost of Goods Sold of $115,600

answer: A Explanation: Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts. Work in Process (3% × $3,000) 90 Finished Goods (23% × $3,000) 690 Cost of Goods Sold (74% × $3,000) 2,220 Manufacturing Overhead 3,000 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

193) Hunkins Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 91,000 Beginning Ending Raw materials inventory $ 14,000 $ 20,000 Work in process inventory $ 57,000 $ 70,000 How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured? A) $229,000 B) $159,000 C) $172,000 D) $176,000

answer: B Explanation: Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

109) Fils 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 4,080 $ 12,780 $ 59,940 $ 76,800 Direct labor 2,110 11,360 53,280 66,750 Manufacturing overhead applied 2,820 7,990 36,190 47,000 Total $ 9,010 $ 32,130 $ 149,410 $ 190,550 Manufacturing overhead for the month was underapplied by $4,000. The Corporation 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 manufacturing 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: A) debit to Cost of Goods Sold of $3,080 B) debit to Cost of Goods Sold of $149,410 C) credit to Cost of Goods Sold of $3,080 D) credit to Cost of Goods Sold of $149,410

answer: A Explanation: Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts. Work in Process (6% × $4,000) $ 240 Finished Goods (17% × $4,000) $ 680 Cost of Goods Sold (77% × $4,000) $ 3,080 Manufacturing Overhead $ 4,000 Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

213) Centore Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 650 $ 7,590 $ 24,860 $ 33,100 Direct labor 2,180 20,700 67,800 90,680 Manufacturing overhead applied 930 7,130 22,940 31,000 Total $ 3,760 $ 35,420 $ 115,600 $ 154,780 Manufacturing overhead for the month was underapplied 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. The work in process inventory at the end of June after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $3,850 B) $3,833 C) $3,687 D) $3,670

answer: A Explanation: Allocating underapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Work in process inventory at the end of June after allocation of overapplied manufacturing overhead = $3,760 + [($930/$31,000) × $3,000] = $3,760 + (3% × $3,000) = $3,850 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

52) Leelanau Corporation uses a job-order costing system. The following data are for last year: Work in process beginning balance $ 10,500 Work in process ending balance $ 19,000 Cost of goods manufactured $ 323,000 Direct materials $ 115,000 Direct Labor $ 78,000 Leelanau applies overhead using a predetermined rate. What amount of overhead was applied to work in process last year? A) $138,500 B) $121,500 C) $130,000 D) $203,500

answer: A Explanation: Cost of Goods Manufactured Direct materials $ 115,000 Direct labor $ 78,000 Manufacturing overhead cost applied to work in process X Total manufacturing costs $ 193,000 + X $ 10,500 Add: Beginning work in process inventory $ 203,500 + X Deduct: Ending work in process inventory $ 19,000 Cost of goods manufactured $ 184,500 + X $323,000 = $184,500 + X X = $323,000 - $184,500 = $138,500 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

153) Echher Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $218,000 and credited for $218,500. The ending balance in the Finished Goods inventory account was $13,000. At the end of the year, manufacturing overhead was overapplied by $36,700. The balance in the Finished Goods inventory account at the beginning of the year was: A) $13,500 B) $36,700 C) $500 D) $13,000

answer: A Explanation: Ending finished goods inventory = Beginning finished goods inventory + Debits - Credits $13,000 = Beginning finished goods inventory + $218,000 - $218,500 Beginning finished goods inventory = $13,000 - $218,000 + $218,500 = $13,500 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

83) Luebke 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 $52,000 and at the end of the month was $30,000. The cost of goods manufactured for the month was $212,000. The actual manufacturing overhead cost incurred was $55,000 and the manufacturing overhead cost applied to Work in Process was $58,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is: A) $231,000 B) $190,000 C) $234,000 D) $212,000

answer: A Explanation: Manufacturing overhead underapplied (overapplied) = Actual manufacturing overhead incurred - Manufacturing overhead applied = $55,000 - $58,000 = $3,000 overapplied Adjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory - Manufacturing overhead overapplied = $52,000 + $212,000 - $30,000 - $3,000 = $231,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

30) In a job-order costing system, indirect labor cost is usually recorded as a debit to: A) Manufacturing Overhead. B) Finished Goods. C) Work in Process. D) Cost of Goods Sold.

answer: A Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

101) Dukes Corporation used a predetermined overhead rate this year of $2 per direct labor-hour, based on an estimate of 20,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred $ 38,000 Actual direct labor-hours worked 18,500 The overapplied or underapplied manufacturing for the year was: A) $1,000 underapplied B) $1,000 overapplied C) $3,000 underapplied D) $3,000 overapplied

answer: A Explanation: Overhead over or underapplied Actual manufacturing overhead incurred $ 38,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 2 per direct labor- hour Actual total amount of the allocation base (b) 18,500 direct labor-hours Manufacturing overhead applied (a) × (b) $ 37,000 Underapplied (overapplied) manufacturing overhead $ 1,000 Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

64) Calfee Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $ 40,000 Work in process $ 19,000 Estimated total manufacturing overhead at the beginning of the year $ 595,000 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Raw materials purchased on account $ 423,000 Raw materials (all direct) requisitioned for use in production $ 420,000 Direct labor cost $ 641,000 Actual direct labor-hours 33,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 143,000 Other manufacturing overhead costs incurred $ 531,000 Cost of goods manufactured $ 1,441,000 The ending balance in the Work in Process inventory account is: A) $200,000 B) $162,000 C) $220,000 D) $181,000

answer: A Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $595,000 ÷ 35,000 direct labor-hours = $17.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.00 per direct labor-hour × 33,000 direct labor-hours = $561,000 Work In Process Balance, beginning 19,000 Cost of goods manufactured 1,441,000 Direct materials 420,000 Direct labor 641,000 Manufacturing overhead applied 561,000 Balance, ending* 200,000 *19,000 + (420,000 + 641,000 + 561,000) − 1,441,000 = 19,000 + (1,622,000) − 1,441,000 = 200,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

156) Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. The manufacturing overhead for the year was: (Round your intermediate calculations to 2 decimal places.) A) $6,000 overapplied B) $10,000 overapplied C) $10,000 underapplied D) $4,000 underapplied

answer: A Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $50,000 ÷ 20,000 direct labor-hours = $2.50 per direct labor-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 54,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 2.50 per direct labor-hour Actual total amount of the allocation base (b) 24,000 direct labor-hours Manufacturing overhead applied (a) × (b) $ 60,000 Underapplied (overapplied) manufacturing overhead $ (6,000 ) Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

110) Karvel Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. For the month of August, Karvel estimated total manufacturing overhead costs at $300,000 and total machine-hours at 75,000 hours. Actual results for the period were manufacturing overhead costs of $290,000 and 75,000 machine-hours. As a result, Karvel would have: A) applied more overhead to Work in Process than the actual amount of overhead cost for the year. B) applied less overhead to Work in Process than the actual amount of overhead cost for the year. C) applied an amount of overhead to Work in Process that was equal to the actual amount of overhead. D) found it necessary to recalculate the predetermined overhead rate.

answer: A Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $300,000 ÷ 75,000 machine-hours = $4 per machine-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Overhead applied = $4 per machine-hour × 75,000 machine-hours = $300,000 Therefore, the amount of overhead applied was greater than the actual manufacturing overhead costs. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

160) Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,660. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The predetermined overhead rate was based on how many estimated machine-hours? A) 1,400 B) 2,101 C) 2,742 D) 1,460

answer: A Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total machine-hours Estimated total machine-hours = Estimated total manufacturing overhead ÷ Predetermined overhead rate = $16,660 ÷ $11.90 per machine-hour = 1,400 machine-hours Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

203) Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 8,500 Purchased during the month $ 38,000 Used in production $ 39,300 Labor: Direct labor-hours worked during the month 1,900 Direct labor cost incurred $ 24,510 Actual manufacturing overhead costs incurred $ 33,300 Inventories: Raw materials, May 30 ? Work in process, May 30 $ 16,937 Work in process inventory on May 30 contains $3,741 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: A) $7,200 B) $1,300 C) $29,500 D) $30,800

answer: A Explanation: Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials − Ending raw materials inventory Ending raw materials inventory = Beginning raw materials inventory + Purchases of raw materials − Raw materials used in production Ending raw materials inventory = $8,500 + $38,000 − $39,300 = $7,200 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

111) Matthias Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of May. 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 $53,000 and the total of the credits to the account was $69,000. Which of the following statements is true? A) Manufacturing overhead applied to Work in Process for the month was $69,000. B) Manufacturing overhead for the month was underapplied by $16,000. C) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $53,000. D) Actual manufacturing overhead incurred during the month was $69,000.

answer: A Explanation: The credits to the Manufacturing overhead account consist of manufacturing overhead applied. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

166) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (2) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The indirect labor cost is: A) $8,000 B) $15,000 C) $18,000 D) $37,000

answer: A Explanation: The debit to Manufacturing Overhead in Entry (4) records indirect labor cost. Work in Process_18,000 Manufacturing Overhead 8,000 Sales Salaries Expense 11,000 Salaries and Wages Payable 37,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

138) Verrett Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $ 475,000 Raw materials (all direct) requisitioned for use in production $ 476,000 Direct labor cost $ 640,000 Manufacturing overhead: Indirect labor cost $ 174,000 Other manufacturing overhead costs incurred $ 498,000 Cost of goods manufactured $ 1,469,000 Cost of goods sold (unadjusted) $ 1,430,000 What is the journal entry to record the direct and indirect labor costs incurred during the year? A) Work in Process 640,000 Manufacturing Overhead 174,000 Wages Payable 814,000 B) Wages Payable 814,000 Work in Process 640,000 Manufacturing Overhead 174,000 C) Wages Payable 814,000 Direct Labor 640,000 Manufacturing Overhead 174,000 D) Direct Labor 640,000 Manufacturing Overhead 174,000 Wages Payable 814,000

answer: A Explanation: The journal entry to record the direct and indirect labor costs is: Work in Process 640,000 Manufacturing Overhead 174,000 Wages Payable 814,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

140) Verrett Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $ 475,000 Raw materials (all direct) requisitioned for use in production $ 476,000 Direct labor cost $ 640,000 Manufacturing overhead: Indirect labor cost $ 174,000 Other manufacturing overhead costs incurred $ 498,000 Cost of goods manufactured $ 1,469,000 Cost of goods sold (unadjusted) $ 1,430,000 The journal entry to record the unadjusted Cost of Goods Sold is: A) Cost of Goods Sold 1,430,000 Finished Goods 1,430,000 B) Finished Goods 1,469,000 Cost of Goods Sold 1,469,000 C) Finished Goods 1,430,000 Cost of Goods Sold 1,430,000 D) Cost of Goods Sold 1,469,000 Finished Goods 1,469,000

answer: A Explanation: The journal entry to record the unadjusted Cost of Goods Sold is: Cost of Goods Sold 1,430,000 Finished Goods 1,430,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

201) Vogel Corporation's cost of goods manufactured last month was $136,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $48,000. Overhead was overapplied by $6,000. Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $171,000 B) $123,000 C) $117,000 D) $136,000

answer: B Explanation: Beginning finished goods inventory $ 35,000 Add: Cost of goods manufactured 136,000 Cost of goods available for sale 171,000 Deduct: Ending finished goods inventory 48,000 Unadjusted cost of goods sold $ 123,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

112) Darrow Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 10,000 direct labor-hours and incurred $80,000 of actual manufacturing overhead cost. If overhead was underapplied by $2,000, the predetermined overhead rate for the Corporation for the year must have been: A) $7.80 per direct labor-hour B) $8.00 per direct labor-hour C) $8.20 per direct labor-hour D) $8.40 per direct labor-hour

answer: A Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Overhead applied $2,000 = $80,000 - Overhead applied Overhead applied = $80,000 - $2,000 = $78,000 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $78,000 = Predetermined overhead rate × 10,000 direct labor-hours Predetermined overhead rate = $78,000 ÷ 10,000 direct labor-hours = $7.80 per direct labor-hour Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

197) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $141,000 B) $185,000 C) $144,000 D) $136,000

answer: B Explanation: Beginning finished goods inventory $ 41,000 Add: Cost of goods manufactured 144,000 Cost of goods available for sale $ 185,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

159) Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $ 157,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 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 overhead for the year was: A) $2,792 underapplied B) $3,842 overapplied C) $2,792 overapplied D) $3,842 underapplied

answer: B Explanation: Actual manufacturing overhead incurred $ 156,000 Manufacturing overhead applied to Work in Process 159,842 Underapplied (overapplied) manufacturing overhead $ (3,842 ) Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

98) Faughn Corporation has provided the following data concerning manufacturing overhead for July: Actual manufacturing overhead incurred $ 69,000 Manufacturing overhead applied to Work in Process $ 79,000 The company's Cost of Goods Sold was $243,000 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? A) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000 B) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000 C) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000 D) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000

answer: B Explanation: Actual manufacturing overhead incurred $ 69,000 Manufacturing overhead applied to Work in Process 79,000 Underapplied (overapplied) manufacturing overhead $ (10,000 ) Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead - Overapplied manufacturing overhead = $243,000 + $0 - $10,000 = $233,000 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

189) Gurtner Corporation has provided the following data concerning last month's operations. Cost of goods manufactured $ 170,000 Underapplied overhead $ 4,000 Beginning Ending Finished goods inventory $ 33,000 $ 40,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $203,000 B) $163,000 C) $170,000 D) $167,000

answer: B Explanation: Beginning finished goods inventory $ 33,000 Add: Cost of goods manufactured 170,000 Cost of goods available for sale 203,000 Deduct: Ending finished goods inventory 40,000 Unadjusted cost of goods sold $ 163,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

79) Tenneson Corporation's cost of goods manufactured for the just completed month was $151,000 and its inventories were as follows: Beginning Ending Work in process inventory $ 63,000 $ 66,000 Finished goods inventory $ 34,000 $ 48,000 How much was the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $137,000 B) $185,000 C) $151,000 D) $136,000

answer: B Explanation: Beginning finished goods inventory $ 34,000 Add: Cost of goods manufactured 151,000 Cost of goods available for sale $ 185,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

11) Entry (4) in the below T-account could represent the cost of overhead applied to Work in Process. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000

answer: FALSE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

195) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the total manufacturing cost for the month on the Schedule of Cost of Goods Manufactured? A) $144,000 B) $160,000 C) $216,000 D) $164,000

answer: B Explanation: Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

80) Shane Corporation has provided the following data concerning last month's operations. Direct materials $ 23,000 Direct labor $ 58,000 Manufacturing overhead applied to Work in Process $ 92,000 Beginning Ending Work in process inventory $ 56,000 $ 69,000 Finished goods inventory $ 33,000 $ 36,000 How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $161,000 B) $157,000 C) $160,000 D) $193,000

answer: B Explanation: Direct materials $ 23,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 92,000 Total manufacturing costs 173,000 Add: Beginning work in process inventory 56,000 229,000 Deduct: Ending work in process inventory 69,000 Cost of goods manufactured $ 160,000 Beginning finished goods inventory $ 33,000 Add: Cost of goods manufactured 160,000 Cost of goods available for sale 193,000 Deduct: Ending finished goods inventory 36,000 Unadjusted cost of goods sold $ 157,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

206) Koczela Inc. has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 17,000 $ 12,000 Finished goods $ 46,000 $ 50,000 Additional information: Direct materials $ 57,000 Direct labor cost $ 87,000 Manufacturing overhead cost incurred $ 63,000 Manufacturing overhead cost applied to Work in Process $ 61,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for May is: A) $205,000 B) $210,000 C) $207,000 D) $212,000

answer: B Explanation: Direct materials $ 57,000 Direct labor 87,000 Manufacturing overhead 61,000 Total manufacturing costs 205,000 Add: Beginning work in process 17,000 222,000 Deduct: Ending work in process 12,000 Cost of goods manufactured $ 210,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

146) The accounting records of Omar Corporation contained the following information for last year: Beginning Ending Direct materials inventory $ 9,000 $ 7,000 Work in process inventory $ 17,000 $ 31,000 Finished goods inventory $ 10,000 $ 15,000 Manufacturing Costs Incurred Direct materials used $ 72,000 Overhead applied $ 24,000 Direct labor cost (10,000 hours) $ 80,000 Depreciation $ 10,000 Rent $ 12,000 Taxes $ 8,000 Unadjusted cost of goods sold (does not include overapplied or underapplied overhead) $ 157,000 Selling, General, and Administrative Costs Incurred Advertising $ 35,000 Rent $ 20,000 Clerical $ 25,000 The cost of goods manufactured for the year was: A) $190,000 B) $162,000 C) $168,000 D) $135,000

answer: B Explanation: Direct materials used $ 72,000 Overhead applied 24,000 Direct labor cost 80,000 Total manufacturing cost $ 176,000 Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory Cost of goods manufactured = $176,000 + $17,000 - $31,000 = $162,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

94) Durphey Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 25,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 99,000 Beginning Ending Raw materials inventory $ 11,000 $ 17,000 How much is the total manufacturing cost for the month on the Schedule of Cost of Goods Manufactured? A) $176,000 B) $172,000 C) $152,000 D) $224,000

answer: B Explanation: Direct materials: Beginning raw materials inventory $ 11,000 Add: Purchases of raw materials 25,000 Total raw materials available 36,000 Deduct: Ending raw materials inventory 17,000 Raw materials used in production 19,000 Deduct: Indirect materials included in manufacturing overhead 4,000 $ 15,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 99,000 Total manufacturing costs $ 172,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

88) Borchardt Corporation has provided the following data concerning last month's operations. Direct materials $ 29,000 Direct labor $ 58,000 Manufacturing overhead applied to Work in Process $ 82,000 Beginning Ending Work in process inventory $ 66,000 $ 57,000 How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured? A) $235,000 B) $178,000 C) $173,000 D) $169,000

answer: B Explanation: Direct materials: $ 29,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 82,000 Total manufacturing costs 169,000 Add: Beginning work in process inventory 66,000 235,000 Deduct: Ending work in process inventory 57,000 Cost of goods manufactured $ 178,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

8) Entry (16) in the below T-account represents the cost of goods manufactured transferred to Finished Goods from Work in Process. Finished Goods Bal. 40,000 (16) 520,000 (15) 540,000 Bal. 60,000

answer: FALSE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

68) Cai Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 17,000 Credits ? Debits 97,000 Bal. 12/31 30,000 Work In Process Bal. 1/1 19,000 Credits 506,000 Direct materials 74,000 Direct labor 13,000 Overhead applied 257,000 Bal. 12/31 ? The cost of indirect materials requisitioned for use in production during the year was: A) $74,000 B) $10,000 C) $40,000 D) $13,000

answer: B Explanation: Raw materials inventory, 1/1 $ 17,000 Add: Debits (purchases of raw materials) 97,000 Materials available for use 114,000 Deduct: Raw materials inventory, 12/31 30,000 Materials requisitioned for use in production 84,000 Deduct: Direct materials 74,000 Indirect materials $ 10,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

61) During September at Renfro Corporation, $65,000 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 $4,000. The journal entry to record this requisition would include a debit to Manufacturing Overhead of: A) $65,000 B) $4,000 C) $0 D) $61,000

answer: B Explanation: Work in Process 61,000 Manufacturing Overhead 4,000 Raw Materials 65,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

136) Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18 Job B19 Job C11 Direct materials $ 12,000 $ 25,000 $ 18,000 Direct labor $ 8,000 $ 10,000 $ 5,000 Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19. How much is Kapanga's work in process inventory balance at the end of October? A) $23,000 B) $30,500 C) $32,000 D) $43,000

answer: B Explanation: Job C11 Direct materials $ 18,000 Direct labor 5,000 Manufacturing overhead (150% of direct labor cost) 7,500 Total product cost $ 30,500 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

180) The Tse Manufacturing Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. The balance in the Finished Goods inventory account at the beginning of the year was: A) $28,000 B) $13,000 C) $17,500 D) $8,500

answer: B Explanation: Finished Goods Bal ? 125,000 110,000 28,000 $28,000 = Beginning balance finished goods + $125,000 − $110,000 Beginning balance finished goods = $28,000 − ($125,000 − $110,000) = $13,000 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

179) Hardigree Corporation uses a job-order costing system. The following data relate to the just completed month's operations. Beginning balance in Work in Process $ 36,000 (1) Raw materials purchased on account $ 207,000 (2) Direct materials requisitioned for use in production $ 161,000 (3) Indirect materials requisitioned for use in production $ 42,000 (4) Direct labor wages incurred $ 87,000 (5) Indirect labor wages incurred $ 101,000 (6) Depreciation recorded on factory equipment $ 42,000 (7) Additional manufacturing overhead costs incurred $ 57,000 (8) Manufacturing overhead costs applied to jobs $ 219,000 (9) Cost of jobs completed and transferred from Work in Process to Finished Goods $ 403,000 The manufacturing overhead was: A) $23,000 Overapplied B) $23,000 Underapplied C) $19,000 Overapplied D) $19,000 Underapplied

answer: B Explanation: Manufacturing Overhead (3) 42,000 (8) 219,000 (5) 101,000 (6) 42,000 (7) 57,000 242,000 219,000 Bal. 23,000 The overhead is $23,000 underapplied because the actual manufacturing overhead cost incurred of $242,000 exceeds the manufacturing overhead applied of $219,000 by $23,000. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

172) The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Beg Bal 4,500 8,000 4,700 Work in Process Beg Bal 3,600 21,700 5,700 8,000 7,800 Finished Goods Beg Bal 1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900 Beg Bal 2,000 11,000 Cost of Goods Sold Beg Bal 19,900 The Cost of Goods Manufactured was: A) $19,900 B) $21,700 C) $41,600 D) $7,700

answer: B Explanation: Work In Process Beg Bal 3,600 COGM 21,700 Direct materials 5,700 Direct labor 8,000 Manufacturing overhead applied 7,800 Finished Goods Beg Bal 1,700 19,900 COGM 21,700 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

63) Ruddick Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Cost of goods manufactured $ 1,486,000 Cost of goods sold (unadjusted) $ 1,337,000 The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: A) Finished Goods 1,337,000 Work in Process 1,337,000 B) Finished Goods 1,486,000 Work in Process 1,486,000 C) Work in Process 1,337,000 Finished Goods 1,337,000 D) Work in Process 1,486,000 Finished Goods 1,486,000

answer: B Explanation: The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: Finished Goods 1,486,000 Work in Process 1,486,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

222) Held Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 5,890 $ 14,070 $ 95,760 $ 115,720 Direct labor 9,680 20,100 136,800 166,580 Manufacturing overhead applied 5,880 10,080 68,040 84,000 Total $ 21,450 $ 44,250 $ 300,600 $ 366,300 Manufacturing overhead for the month was overapplied 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 journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for June would include the following: A) credit to Work in Process of $21,450 B) credit to Work in Process of $70 C) debit to Work in Process of $21,450 D) debit to Work in Process of $70

answer: B Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. Manufacturing Overhead 1,000 Work in Process (7% × $1,000) 70 Finished Goods (12% × $1,000) 120 Cost of Goods Sold (81% × $1,000) 810 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

221) Held Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 5,890 $ 14,070 $ 95,760 $ 115,720 Direct labor 9,680 20,100 136,800 166,580 Manufacturing overhead applied 5,880 10,080 68,040 84,000 Total $ 21,450 $ 44,250 $ 300,600 $ 366,300 Manufacturing overhead for the month was overapplied 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 cost of goods sold for June after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $301,410 B) $299,790 C) $299,600 D) $301,600

answer: B Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Cost of goods sold for June after allocation of overapplied manufacturing overhead = $300,600 − [($68,040/$84,000) × $1,000] = $300,600 − (81% × $1,000) = $299,790 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

132) Tyare Corporation had the following inventory balances at the beginning and end of May: May 1 May 30 Raw materials $ 25,500 $ 30,000 Finished Goods $ 75,000 $ 66,000 Work in Process $ 13,500 $ 16,500 During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost. The direct materials cost in the May 1 Work in Process inventory account totaled: A) $9,900 B) $5,400 C) $9,000 D) $4,500

answer: B Explanation: Beginning work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process Direct material = Beginning work in process inventory - Direct labor - Manufacturing overhead applied to work in process Direct material = $13,500 - ($15 per direct labor-hour × 300 direct labor-hours) - ($12 per direct labor-hour × 300 direct labor-hours) Direct material = $13,500 - $4,500 - $3,600 = $5,400 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

86) Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $22,000 at the beginning of the month and $17,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $55,000 and direct labor cost of $28,000. The actual manufacturing overhead cost incurred was $53,000. The manufacturing overhead cost applied to Work in Process was $51,000. The cost of goods manufactured for June was: A) $141,000. B) $139,000. C) $134,000. D) $136,000.

answer: B Explanation: Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory - Ending work in process inventory = $55,000 + $28,000 + $51,000 + $22,000 - $17,000 = $139,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

143) The accounting records of Omar Corporation contained the following information for last year: Beginning Ending Direct materials inventory $ 9,000 $ 7,000 Work in process inventory $ 17,000 $ 31,000 Finished goods inventory $ 10,000 $ 15,000 Manufacturing Costs Incurred Direct materials used $ 72,000 Overhead applied $ 24,000 Direct labor cost (10,000 hours) $ 80,000 Depreciation $ 10,000 Rent $ 12,000 Taxes $ 8,000 Unadjusted cost of goods sold (does not include overapplied or underapplied overhead) $ 157,000 Selling, General, and Administrative Costs Incurred Advertising $ 35,000 Rent $ 20,000 Clerical $ 25,000 The amount of direct material purchased during the year was: A) $66,000 B) $70,000 C) $65,000 D) $74,000

answer: B Explanation: Direct materials used in production = Beginning direct materials inventory + Purchases of direct materials - Ending direct materials inventory Purchases of direct materials = Direct materials used in production - Beginning direct materials inventory + Ending direct materials inventory Purchases of direct materials = $72,000 - $9,000 + $7,000 = $70,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

194) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the direct materials cost for the month on the Schedule of Cost of Goods Manufactured? A) $38,000 B) $24,000 C) $33,000 D) $43,000

answer: B Explanation: Direct materials: Beginning raw materials inventory $ 10,000 Add: Purchases of raw materials 33,000 Total raw materials available 43,000 Deduct: Ending raw materials inventory 15,000 Raw materials used in production 28,000 Deduct: Indirect materials included in manufacturing overhead 4,000 Direct materials $ 24,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

134) Tyare Corporation had the following inventory balances at the beginning and end of May: May 1 May 30 Raw materials $ 25,500 $ 30,000 Finished Goods $ 75,000 $ 66,000 Work in Process $ 13,500 $ 16,500 During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost. The amount of direct labor cost in the May 30 Work in Process inventory was: A) $4,200 B) $5,250 C) $4,950 D) $9,450

answer: B Explanation: Ending work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process $16,500 = $7,050 + $15X + $12X $27X = $16,500 - $7,050 = $9,450 X = 350 Direct labor cost = $15 × 350 = $5,250 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

162) Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,660. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The overhead for the year was: A) $714 overapplied B) $7,626 underapplied C) $714 underapplied D) $7,626 overapplied

answer: B Explanation: Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $11.90 per machine-hour × 1,460 machine-hours = $17,374 Actual manufacturing overhead incurred $ 25,000 Manufacturing overhead applied to Work in Process 17,374 Underapplied (overapplied) manufacturing overhead $ 7,626 Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

42) In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations? A) Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory - Beginning work in process inventory B) Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory C) Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory - Ending finished goods inventory D) Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory - Beginning finished goods inventory

answer: B Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

36) Refer to the T-account below: Prepaid Insurance Bal. 30,000 (8) 9,000 Entry (8) could represent which of the following? A) Payment of insurance for the upcoming period. B) Insurance cost incurred on the factory which is added to the Manufacturing Overhead account. C) Overhead cost applied to Work in Process. D) Overhead cost applied to Finished Goods.

answer: B Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

44) If manufacturing overhead is underapplied, then: A) actual manufacturing overhead cost is less than estimated manufacturing overhead cost. B) the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. C) the predetermined overhead rate is too high. D) the Manufacturing Overhead account will have a credit balance at the end of the year.

answer: B Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

62) Tomlison Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Cost of goods manufactured $ 1,589,000 Cost of goods sold (unadjusted) $ 1,517,000 The journal entry to record the unadjusted Cost of Goods Sold is: A) Finished Goods 1,517,000 Cost of Goods Sold 1,517,000 B) Cost of Goods Sold 1,517,000 Finished Goods 1,517,000 C) Finished Goods 1,589,000 Cost of Goods Sold 1,589,000 D) Cost of Goods Sold 1,589,000 Finished Goods 1,589,000

answer: B Explanation: The journal entry to record the unadjusted Cost of Goods Sold is: Cost of Goods Sold 1,517,000 Finished Goods 1,517,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

67) Molzahn Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $481,250 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Actual direct labor-hours 40,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 179,000 Other manufacturing overhead costs incurred $ 465,000 Manufacturing overhead is overapplied or underapplied by: (Round your intermediate calculations to 2 decimal places.) A) $165,000 Overapplied B) $94,000 Underapplied C) $165,000 Underapplied D) $94,000 Overapplied

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $481,250 ÷ 35,000 direct labor-hours = $13.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.75 per direct labor-hour × 40,000 direct labor-hours = $550,000 Actual manufacturing overhead incurred ($179,000 + $465,000) $ 644,000 Manufacturing overhead applied to Work in Process 550,000 Underapplied (overapplied) manufacturing overhead $ 94,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

147) Tevebaugh Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $ 30,000 Estimated total manufacturing overhead at the beginning of the year $ 568,000 Estimated direct labor-hours at the beginning of the year 32,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $ 501,000 Direct labor cost $ 683,000 Actual direct labor-hours 33,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 176,000 Other manufacturing overhead costs incurred $ 420,000 Selling and administrative: Selling and administrative salaries $ 219,000 Other selling and administrative expenses $ 346,000 Cost of goods manufactured $ 1,567,000 Sales revenue $ 2,498,000 Cost of goods sold (unadjusted) $ 1,376,000 How much is the total manufacturing cost added to work in process during the year? (Round your intermediate calculations to 2 decimal places.) A) $1,268,750 B) $1,769,750 C) $1,567,000 D) $1,184,000

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $568,000 ÷ 32,000 direct labor-hours = $17.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.75 per direct labor-hour × 33,000 direct labor-hours = $585,750 Direct materials $ 501,000 Direct labor 683,000 Manufacturing overhead applied 585,750 Total manufacturing cost $ 1,769,750 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

51) Lister Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $624,000 Estimated direct labor-hours at the beginning of the year 39,000 direct labor-hours Results of operations: Actual direct labor-hours 36,000 direct labor-hours Manufacturing Overhead: Indirect labor cost $ 131,000 Other manufacturing overhead costs incurred $ 543,000 The total amount of manufacturing overhead applied to production is: A) $1,547,000 B) $576,000 C) $624,000 D) $674,000

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $624,000 ÷ 39,000 direct labor-hours = $16.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $16.00 per direct labor-hour × 36,000 direct labor-hours = $576,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

155) Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. If Job #461 contained 100 units, the unit product cost on the completed job cost sheet would be: (Round your intermediate calculations to 2 decimal places.) A) $61.75 B) $62.50 C) $63.10 D) $55.00

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $50,000 ÷ 20,000 direct labor-hours = $2.50 per direct labor-hour Direct labor-hours on Job #461 = $1,500 ÷ $5 per direct labor-hour = 300 direct labor-hours Unit Product Cost Direct materials $ 4,000 Direct labor 1,500 Manufacturing overhead $(2.50 per direct labor-hour × 300 direct labor-hours) 750 Total product cost $ 6,250 Unit product cost $(6,250 ÷ 100 units) $ 62.50 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

164) Baka 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 $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600. The applied manufacturing overhead for the year was closest to: A) $229,586 B) $234,600 C) $242,006 D) $236,854

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total direct labor-hours = $239,700 ÷ 4,700 direct labor-hours = $51.00 per direct labor-hour Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $51.00 per direct labor-hour × 4,600 direct labor-hours = $234,600 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

105) Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25,000 machine-hours and $10,000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26,200 machine-hours and $11,300 of manufacturing overhead. What was Chipata's underapplied or overapplied overhead for the year? A) $480 overapplied B) $820 underapplied C) $1,300 overapplied D) $1,300 underapplied

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $10,000 ÷ 25,000 machine-hours = $0.40 per machine-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 11,300 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 0.40 per machine-hour Actual total amount of the allocation base (b) 26,200 machine-hours Manufacturing overhead applied (a) × (b) $ 10,480 Underapplied (overapplied) manufacturing overhead $ 820 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

108) Bayest Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 56,000 actual direct labor-hours and incurred $352,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 60,000 direct labor-hours during the year and incur $330,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was: A) overapplied by $44,000 B) underapplied by $44,000 C) overapplied by $22,000 D) underapplied by $22,000

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 352,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 5.50 per direct labor-hour Actual total amount of the allocation base (b) 56,000 direct labor-hours Manufacturing overhead applied (a) × (b) $ 308,000 Underapplied (overapplied) manufacturing overhead $ 44,000 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

107) Pine Publishing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year the Corporation estimated its total manufacturing overhead cost at $500,000 and its direct labor-hours at 125,000 hours. The actual overhead cost incurred during the year was $450,000 and the actual direct labor-hours incurred on jobs during the year was 115,000 hours. The manufacturing overhead for the year would be: A) $10,000 underapplied B) $10,000 overapplied C) $50,000 underapplied D) $50,000 overapplied

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $500,000 ÷ 125,000 direct labor-hours = $4 per direct labor-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 450,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 4 per direct labor-hour Actual total amount of the allocation base (b) 115,000 direct labor-hours Manufacturing overhead applied (a) × (b) $ 460,000 Underapplied (overapplied) manufacturing overhead $ (10,000 ) Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

157) Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $ 157,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 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: A) $34.06 B) $34.90 C) $34.67 D) $35.52

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $157,050 ÷ 4,500 machine-hours = $34.90 per machine-hour Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

165) Baka 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 $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600. The overhead for the year was: A) $5,100 underapplied B) $7,400 underapplied C) $5,100 overapplied D) $7,400 overapplied

answer: B Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total direct labor-hours = $239,700 ÷ 4,700 direct labor-hours = $51.00 per direct labor-hour Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $51.00 per direct labor-hour × 4,600 direct labor-hours = $234,600 Actual manufacturing overhead incurred $ 242,000 Manufacturing overhead applied to Work in Process 234,600 Underapplied (overapplied) manufacturing overhead $ 7,400 Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

53) During March, Zea Inc. transferred $50,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $56,000. The journal entries to record these transactions would include a: A) credit to Cost of Goods Sold of $56,000. B) debit to Finished Goods of $56,000. C) credit to Work in Process of $50,000. D) credit to Finished Goods of $50,000.

answer: C Explanation: Finished Goods 50,000 Work in Process 50,000 Cost of Goods Sold 56,000 Finished Goods 56,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

89) Weyant Corporation has provided the following data concerning last month's operations. Direct materials $ 18,000 Direct labor $ 58,000 Manufacturing overhead applied to Work in Process $ 75,000 Overapplied overhead $ 6,000 Beginning Ending Raw materials inventory $ 13,000 $ 19,000 Work in process inventory $ 64,000 $ 74,000 Finished goods inventory $ 32,000 $ 40,000 The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $173,000 B) $127,000 C) $133,000 D) $141,000

answer: B Explanation: Schedule of Cost of Goods Manufactured Direct materials $ 18,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 75,000 Total manufacturing costs 151,000 Add: Beginning work in process inventory 64,000 215,000 Deduct: Ending work in process inventory 74,000 Cost of goods manufactured $ 141,000 Schedule of Cost of Goods Sold Beginning finished goods inventory $ 32,000 Add: Cost of goods manufactured 141,000 Cost of goods available for sale 173,000 Deduct: Ending finished goods inventory 40,000 Unadjusted cost of goods sold 133,000 Deduct: Overapplied overhead 6,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $ 127,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

92) Cienfuegos Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 36,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 90,000 Overapplied overhead $ 3,000 Beginning Ending Raw materials inventory $ 10,000 $ 21,000 Work in process inventory $ 62,000 $ 70,000 Finished goods inventory $ 36,000 $ 40,000 The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $157,000 B) $154,000 C) $161,000 D) $197,000

answer: B Explanation: Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $ 10,000 Add: Purchases of raw materials 36,000 Total raw materials available 46,000 Deduct: Ending raw materials inventory 21,000 Raw materials used in production 25,000 Deduct: Indirect materials included in manufacturing overhead 4,000 $ 21,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 90,000 Total manufacturing costs 169,000 Add: Beginning work in process inventory 62,000 231,000 Deduct: Ending work in process inventory 70,000 Cost of goods manufactured $ 161,000 Schedule of Cost of Goods Sold Beginning finished goods inventory $ 36,000 Add: Cost of goods manufactured 161,000 Cost of goods available for sale 197,000 Deduct: Ending finished goods inventory 40,000 Unadjusted cost of goods sold 157,000 Deduct: Overapplied overhead 3,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $ 154,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

190) Gurtner Corporation has provided the following data concerning last month's operations. Cost of goods manufactured $ 170,000 Underapplied overhead $ 4,000 Beginning Ending Finished goods inventory $ 33,000 $ 40,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $170,000 B) $167,000 C) $203,000 D) $163,000

answer: B Explanation: Schedule of Cost of Goods Sold Beginning finished goods inventory $ 33,000 Add: Cost of goods manufactured 170,000 Cost of goods available for sale 203,000 Deduct: Ending finished goods inventory 40,000 Unadjusted cost of goods sold 163,000 Deduct: Overapplied overhead 0 Add: Underapplied overhead 4,000 Adjusted cost of goods sold $ 167,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

170) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (2) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The cost of direct materials used is: A) $14,000 B) $15,000 C) $18,000 D) $24,000

answer: B Explanation: The cost of direct materials used is the debit to Work In Process in entry (2). Work in Process 15,000 Manufacturing Overhead 9,000 Raw Materials 24,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

119) Niebla Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. 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 $72,000 and the total of the credits to the account was $77,000. Which of the following statements is true? A) Manufacturing overhead applied to Work in Process for the month was $72,000. B) Actual manufacturing overhead for the month was $72,000. C) Manufacturing overhead for the month was underapplied by $5,000. D) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $77,000.

answer: B Explanation: The debits to the Manufacturing Overhead account consist of the actual manufacturing overhead for the month. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

49) Farrel Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Direct labor cost $ 574,000 Manufacturing overhead: Indirect labor cost $ 163,000 Other manufacturing overhead costs incurred $ 584,000 What is the journal entry to record the direct and indirect labor costs incurred during the year? A) Wages Payable 737,000 Direct Labor 574,000 Manufacturing Overhead 163,000 B) Work in Process 574,000 Manufacturing Overhead 163,000 Wages Payable 737,000 C) Wages Payable 737,000 Work in Process 574,000 Manufacturing Overhead 163,000 D) Direct Labor 574,000 Manufacturing Overhead 163,000 Wages Payable 737,000

answer: B Explanation: The journal entry to record the direct and indirect labor costs is: Work in Process 574,000 Manufacturing Overhead 163,000 Wages Payable or cash 737,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

174) The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Beg Bal 4,500 8,000 4,700 Work in Process Beg Bal 3,600 21,700 5,700 8,000 7,800 Finished Goods Beg Bal 1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900 Beg Bal 2,000 11,000 Cost of Goods Sold Beg Bal 19,900 The direct materials cost was: A) $8,000 B) $5,700 C) $3,600 D) $4,700

answer: B Explanation: The key is to recognize that the 5,700 debit entry in the Work in Process account represents direct materials. The journal entry would have been: Work in Process 5,700 Manufacturing Overhead 2,300 Raw Materials 8,000 The direct materials is the $5,700 debit to Work in Process. Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

169) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (b) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The manufacturing overhead applied is: A) $24,000 B) $31,000 C) $38,000 D) $42,000

answer: B Explanation: The manufacturing overhead applied is the credit to Manufacturing Overhead in the T-accounts. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

69) The following accounts are from last year's books at Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the manufacturing overapplied or underapplied for the year? A) $6,000 underapplied B) $6,000 overapplied C) $26,000 underapplied D) $26,000 overapplied

answer: B Explanation: The manufacturing overhead is overapplied by $6,000 because the manufacturing overhead applied of $210,000 exceeds the manufacturing overhead incurred by $6,000. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

106) Daget Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $364,140. At the end of the year, actual direct labor-hours for the year were 24,000 hours, manufacturing overhead for the year was overapplied by $8,060, and the actual manufacturing overhead was $359,140. The predetermined overhead rate for the year must have been closest to: A) $15.43 per direct labor-hour B) $15.30 per direct labor-hour C) $15.17 per direct labor-hour D) $14.96 per direct labor-hour

answer: B Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied Manufacturing overhead applied = Actual manufacturing overhead + Overapplied manufacturing overhead = $359,140 + $8,060 = $367,200 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $367,200 ÷ 24,000 direct labor-hours = $15.30 per direct labor-hour Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

100) At the beginning of the year, manufacturing overhead for the year was estimated to be $670,700. At the end of the year, actual direct labor-hours for the year were 36,200 hours, the actual manufacturing overhead for the year was $665,700, and manufacturing overhead for the year was overapplied by $22,100. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been: A) 35,037 direct labor-hours B) 35,300 direct labor-hours C) 36,200 direct labor-hours D) 33,874 direct labor-hours

answer: B Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied −$22,100 = $665,700 - Overhead applied Manufacturing overhead applied = $665,700 + $22,100 = $687,800 Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours Predetermined overhead rate = Manufacturing overhead applied ÷ Actual direct labor-hours = $687,800 ÷ 36,200 direct labor-hours = $19 per direct labor-hour Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated direct labor-hours Estimated direct labor-hours = Estimated total manufacturing overhead ÷ Predetermined overhead rate = $670,700 ÷ $19 per direct labor-hour = 35,300 direct labor-hours Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

181) The Tse Manufacturing Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. If the estimated manufacturing overhead for the year was $24,000, and the applied overhead was $26,500, the actual manufacturing overhead cost for the year was: A) $19,500 B) $22,000 C) $28,500 D) $31,000

answer: B Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead − Manufacturing overhead applied −$4,500 = Actual manufacturing overhead − $26,500 Actual manufacturing overhead = $26,500 − $4,500 = $22,000 Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

115) The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000, while the manufacturing overhead applied to Work in Process was $73,000. The Corporation's Cost of Goods Sold was $451,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true? A) Manufacturing overhead was overapplied by $20,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $471,000 B) Manufacturing overhead was underapplied by $20,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $431,000 C) Manufacturing overhead was overapplied by $20,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $431,000 D) Manufacturing overhead was underapplied by $20,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $471,000

answer: C Explanation: Actual manufacturing overhead incurred $ 53,000 Manufacturing overhead applied to Work in Process 73,000 Underapplied (overapplied) manufacturing overhead $ (20,000 ) Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead - Overapplied manufacturing overhead = $451,000 + $0 - $20,000 = $431,000 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Analyze AACSB: Analytical Thinking AICPA: BB Critical Thinking;

78) St. Johns Corporation uses a job-order costing system and has provided the following partially completed summary T-accounts for the just completed period: Work In Process Bal 22,000 Credits 534,000 Direct materials 85,000 Direct labor 161,000 Overhead applied 273,000 Bal. ? Manufacturing Overhead Debits 200,000 Credits ? Manufacturing overhead for the period was: A) $7,000 Underapplied B) $73,000 Underapplied C) $73,000 Overapplied D) $7,000 Overapplied

answer: C Explanation: Actual manufacturing overhead incurred (Debits to Manufacturing Overhead) $ 200,000 Deduct: Manufacturing overhead applied to Work in Process 273,000 Underapplied (overapplied) manufacturing overhead $ (73,000 ) Alternatively, Manufacturing Overhead Debits 200,000 Credits 273,000 Bal. 73,000 A credit balance in Manufacturing Overhead means that manufacturing overhead is overapplied by the amount of the balance. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

192) Hunkins Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 91,000 Beginning Ending Raw materials inventory $ 14,000 $ 20,000 Work in process inventory $ 57,000 $ 70,000 How much is the total manufacturing cost for the month on the Schedule of Cost of Goods Manufactured? A) $159,000 B) $229,000 C) $172,000 D) $176,000

answer: C Explanation: Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

196) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured? A) $216,000 B) $160,000 C) $144,000 D) $164,000

answer: C Explanation: Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

207) Koczela Inc. has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 17,000 $ 12,000 Finished goods $ 46,000 $ 50,000 Additional information: Direct materials $ 57,000 Direct labor cost $ 87,000 Manufacturing overhead cost incurred $ 63,000 Manufacturing overhead cost applied to Work in Process $ 61,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for May is: A) $206,000 B) $214,000 C) $208,000 D) $210,000

answer: C Explanation: Direct materials $ 57,000 Direct labor 87,000 Manufacturing overhead 61,000 Total manufacturing costs 205,000 Add: Beginning work in process 17,000 222,000 Deduct: Ending work in process 12,000 Cost of goods manufactured $ 210,000 Overhead over or underapplied Actual manufacturing overhead incurred $ 63,000 Manufacturing overhead applied to Work in Process 61,000 Underapplied (overapplied) manufacturing overhead $ 2,000 Finished goods inventory, beginning $ 46,000 Add: Cost of goods manufactured 210,000 Cost of goods available for sale 256,000 Deduct: Finished goods inventory, ending 50,000 Unadjusted cost of goods sold 206,000 Add: Underapplied overhead 2,000 Adjusted cost of goods sold $ 208,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

176) The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Beg Bal 4,500 8,000 4,700 Work in Process Beg Bal 3,600 21,700 5,700 8,000 7,800 Finished Goods Beg Bal 1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900 Beg Bal 2,000 11,000 Cost of Goods Sold Beg Bal 19,900 The manufacturing overhead was: A) $200 overapplied B) $2,700 overapplied C) $200 underapplied D) $2,700 underapplied

answer: C Explanation: Manufacturing Overhead 2,300 7,800 3,000 2,700 Underapplied manufacturing Overhead 200 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

144) The accounting records of Omar Corporation contained the following information for last year: Beginning Ending Direct materials inventory $ 9,000 $ 7,000 Work in process inventory $ 17,000 $ 31,000 Finished goods inventory $ 10,000 $ 15,000 Manufacturing Costs Incurred Direct materials used $ 72,000 Overhead applied $ 24,000 Direct labor cost (10,000 hours) $ 80,000 Depreciation $ 10,000 Rent $ 12,000 Taxes $ 8,000 Unadjusted cost of goods sold (does not include overapplied or underapplied overhead) $ 157,000 Selling, General, and Administrative Costs Incurred Advertising $ 35,000 Rent $ 20,000 Clerical $ 25,000 The total costs added to Work in Process during the year were: A) $206,000 B) $162,000 C) $176,000 D) $182,000

answer: C Explanation: Direct materials used $ 72,000 Overhead applied 24,000 Direct labor cost 80,000 Total $ 176,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

85) Frankin Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 26,000 Indirect materials included in manufacturing overhead $ 6,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 97,000 Beginning Ending Raw materials inventory $ 11,000 $ 17,000 Work in process inventory $ 52,000 $ 66,000 How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured? A) $175,000 B) $221,000 C) $155,000 D) $169,000

answer: C Explanation: Direct materials: Beginning raw materials inventory $ 11,000 Add: Purchases of raw materials 26,000 Total raw materials available 37,000 Deduct: Ending raw materials inventory 17,000 Raw materials used in production 20,000 Deduct: Indirect materials included in manufacturing overhead 6,000 $ 14,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 97,000 Total manufacturing costs 169,000 Add: Beginning work in process inventory 52,000 221,000 Deduct: Ending work in process inventory 66,000 Cost of goods manufactured $ 155,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

81) Dipaola Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 26,000 Indirect materials included in manufacturing overhead $ 6,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 87,000 Overapplied overhead $ 6,000 Beginning Ending Raw materials inventory $ 12,000 $ 18,000 Work in process inventory $ 46,000 $ 64,000 Finished goods inventory $ 31,000 $ 46,000 How much is the direct materials cost for the month on the Schedule of Cost of Goods Manufactured? A) $38,000 B) $32,000 C) $14,000 D) $26,000

answer: C Explanation: Direct materials: Beginning raw materials inventory $ 12,000 Add: Purchases of raw materials 26,000 Total raw materials available 38,000 Deduct: Ending raw materials inventory 18,000 Raw materials used in production 20,000 Deduct: Indirect materials included in manufacturing overhead 6,000 Direct materials $ 14,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

75) Solt Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Finished Goods Bal. 1/1 38,000 Credits ? Debits ? Bal. 12/31 50,000 The Cost of Goods Manufactured for the year was $415,000. The unadjusted Cost of Goods Sold for the year was: A) $503,000 B) $415,000 C) $403,000 D) $453,000

answer: C Explanation: Finished goods inventory, 1/1 38,000 Add: Debits (Cost of goods manufactured) 415,000 Goods available for sale 453,000 Deduct: Finished goods inventory, 12/31 50,000 Cost of goods sold 403,000 Alternatively, Finished Goods Bal. 1/1 38,000 Credits (plug) 403,000 Debits (Cost of Goods Manufactured) 415,000 Bal. 12/31 50,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

57) On December 1, Mogro Corporation had $26,000 of raw materials on hand. During the month, the Corporation purchased an additional $60,000 of raw materials. During December, $62,000 of raw materials were requisitioned from the storeroom for use in production. The debits entered in the Raw Materials account during the month of December total: A) $26,000 B) $86,000 C) $60,000 D) $62,000

answer: C Explanation: Raw Materials 60,000 Accounts Payable 60,000 Work in Process 62,000 Raw Materials 62,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

47) Gullett Corporation had $26,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a: A) debit to Raw Materials of $101,000 B) credit to Raw Materials of $75,000 C) debit to Raw Materials of $75,000 D) credit to Raw Materials of $101,000

answer: C Explanation: Raw Materials 75,000 Accounts Payable 75,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

72) Hougham Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 15,000 Credits ? Debits 109,000 Bal. 12/31 21,000 The cost of raw materials requisitioned for use in production during the year was: A) $109,000 B) $145,000 C) $103,000 D) $124,000

answer: C Explanation: Raw materials inventory, 1/1 $ 15,000 Add: Debits (purchases of raw materials) 109,000 Materials available for use 124,000 Deduct: Raw materials inventory, 12/31 21,000 Materials requisitioned for use in production $ 103,000 Alternatively, Raw Materials Bal. 1/1 15,000 Credits (plug) 103,000 Debits 109,000 Bal. 12/31 21,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

177) Hardigree Corporation uses a job-order costing system. The following data relate to the just completed month's operations. Beginning balance in Work in Process $ 36,000 (1) Raw materials purchased on account $ 207,000 (2) Direct materials requisitioned for use in production $ 161,000 (3) Indirect materials requisitioned for use in production $ 42,000 (4) Direct labor wages incurred $ 87,000 (5) Indirect labor wages incurred $ 101,000 (6) Depreciation recorded on factory equipment $ 42,000 (7) Additional manufacturing overhead costs incurred $ 57,000 (8) Manufacturing overhead costs applied to jobs $ 219,000 (9) Cost of jobs completed and transferred from Work in Process to Finished Goods $ 403,000 The ending balance in the Work in Process account is closest to: A) $110,000 B) $120,000 C) $100,000 D) $90,000

answer: C Explanation: Work In Process Bal. 36,000 (9) 403,000 (2) 161,000 (4) 87,000 (8) 219,000 Bal. 100,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

216) Reith Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 1,850 $ 10,440 $ 58,560 $ 70,850 Direct labor 3,510 22,620 126,880 153,010 Manufacturing overhead applied 1,560 7,800 42,640 52,000 Total $ 6,920 $ 40,860 $ 228,080 $ 275,860 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 November would include the following: A) debit to Finished Goods of $40,860 B) credit to Finished Goods of $40,860 C) credit to Finished Goods of $600 D) debit to Finished Goods of $600

answer: C Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. Manufacturing Overhead 4,000 Work in Process (3% × $4,000) 120 Finished Goods (15% × $4,000) 600 Cost of Goods Sold (82% × $4,000) 3,280 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

212) Jaquish Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 2,440 $ 7,800 $ 37,900 $ 48,140 Direct labor 3,190 12,480 60,640 76,310 Manufacturing overhead applied 3,200 6,400 30,400 40,000 Total $ 8,830 $ 26,680 $ 128,940 $ 164,450 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 January would include the following: A) credit to Work in Process of $480 B) debit to Work in Process of $8,830 C) debit to Work in Process of $480 D) credit to Work in Process of $8,830

answer: C Explanation: Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts. Work in Process (8% × $6,000) 480 Finished Goods (16% × $6,000) 960 Cost of Goods Sold (76% × $6,000) 4,560 Manufacturing Overhead 6,000 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

74) The following accounts are from last year's books at Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 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? A) $252,000 B) $454,000 C) $510,000 D) $460,000

answer: C Explanation: Cost of goods manufactured is represented by the debit to Finished Goods and the credit to Work in Process (entry f) = $510,000 cost of goods manufactured Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

96) Beshaw Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 3,440 $ 8,450 $ 61,880 $ 73,770 Direct labor 6,160 16,250 119,000 141,410 Manufacturing overhead applied 3,300 6,050 45,650 55,000 Total $ 12,900 $ 30,750 $ 226,530 $ 270,180 Manufacturing overhead for the month was underapplied by $7,000. The Corporation 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 manufacturing overhead applied during the month in those accounts. The cost of goods sold for January after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $233,530 B) $220,720 C) $232,340 D) $219,530

answer: C Explanation: Cost of goods sold after allocation of underapplied overhead = $226,530 + [($45,650/$55,000) × $7,000] = $226,530 + (83% × $7,000) = $232,340 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

118) Coatney 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 3,760 $ 15,870 $ 76,130 $ 95,760 Direct labor 2,400 12,420 59,580 74,400 Manufacturing overhead applied 1,950 6,240 30,810 39,000 Total $ 8,110 $ 34,530 $ 166,520 $ 209,160 Manufacturing overhead for the month was overapplied by $7,000. The Corporation 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 manufacturing overhead applied during the month in those accounts. The finished goods inventory at the end of October after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $35,686 B) $33,374 C) $33,410 D) $35,650

answer: C Explanation: Ending finished goods inventory after allocation of overapplied manufacturing overhead = $34,530 − [($6,240/$39,000) × $7,000] = $34,530 − (16% × $7,000) = $33,410 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

84) Able Corporation uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that $2,000 of raw materials has been drawn from the storeroom and used in the production of Job 110, but that no entry has been made in the accounting records for the use of these materials. Job 110 has been completed but it is unsold at year end. This error will cause: A) Work in Process to be understated by $2,000 at year end. B) Cost of Goods Manufactured to be overstated by $2,000 for the year. C) Finished Goods to be understated by $2,000 at the end of the year. D) Cost of Goods Sold to be overstated by $2,000 for the year.

answer: C Explanation: Job 110 has been completed, but has not been sold. Therefore, the error will reduce Raw Materials and increase Finished Goods by $2,000. Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

161) Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,660. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The applied manufacturing overhead for the year was closest to: A) $26,071 B) $18,119 C) $17,374 D) $16,660

answer: C Explanation: Manufacturing overhead applied = Predetermined overhead rate × Actual direct labor-hours = $11.90 per machine-hour × 1,460 machine-hours = $17,374 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

37) When manufacturing overhead is applied to production, it is added to: A) the Cost of Goods Sold account. B) the Raw Materials account. C) the Work in Process account. D) the Finished Goods inventory account.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

34) Refer to the T-account below: Manufacturing Overhead (2) 9,000 (12) 167,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 159,000 167,000 Bal. 8,000 The ending balance of $8,000 represents which of the following? A) Underapplied overhead. B) Manufacturing overhead that will be carried over to the next period. C) Overapplied overhead. D) A bookkeeping error.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

39) Refer to the T-account below: Manufacturing Overhead (2) 4,000 (9) 150,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 154,000 150,000 Bal. 4,000 Entry (4) could represent all of the following except: A) Indirect labor cost incurred. B) Factory insurance cost. C) Overhead cost applied to Work in Process. D) Depreciation on factory equipment.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

40) Refer to the T-account below: Work In Process Bal. 30,000 (12) 270,000 (4) 90,000 (6) 70,000 (9) 110,000 Bal. 30,000 Entry (12) could represent which of the following? A) Direct labor cost incurred in production. B) Purchases of raw materials. C) The cost of goods manufactured transferred to Finished Goods. D) The cost of indirect materials incurred in production.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

41) In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the "Total raw materials available" is computed by adding together the "Beginning raw materials inventory" and: A) Ending raw materials inventory B) Raw materials used in production C) Purchases of raw materials D) Indirect materials included in manufacturing overhead

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

9) Entry (11) in the below T-account could represent overhead cost applied to Work in Process. Work In Process Bal. 40,000 (11) 330,000 (2) 100,000 (3) 90,000 (7) 120,000 Bal. 20,000

answer: FALSE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

45) Overapplied manufacturing overhead would result if: A) the plant was operated at less than normal capacity. B) manufacturing overhead costs incurred were less than estimated manufacturing overhead costs. C) manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production. D) manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production.

answer: C Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

133) Tyare Corporation had the following inventory balances at the beginning and end of May: May 1 May 30 Raw materials $ 25,500 $ 30,000 Finished Goods $ 75,000 $ 66,000 Work in Process $ 13,500 $ 16,500 During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost. The actual direct labor-hours worked during May totaled: A) 2,800 hours B) 3,500 hours C) 3,300 hours D) 3,600 hours

answer: C Explanation: Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Amount of the allocation base incurred = Overhead applied ÷ Predetermined overhead rate Amount of the allocation base incurred = $39,600 ÷ $12 per direct labor-hour = 3,300 direct labor-hours Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

152) Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $ 546,000 Estimated direct labor-hours at the beginning of the year 42,000 direct labor-hours Results of operations: Actual direct labor-hours 47,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 152,000 Other manufacturing overhead costs incurred $ 454,000 Cost of goods manufactured $ 1,569,000 Cost of goods sold (unadjusted) $ 1,458,000 The adjusted Cost of Goods Sold for the year is: A) $1,603,000 B) $1,458,000 C) $1,453,000 D) $1,463,000

answer: C Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $546,000 ÷ 42,000 direct labor-hours = $13.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.00 per direct labor-hour × 47,000 direct labor-hours = $611,000 Actual manufacturing overhead incurred ($152,000 + $454,000) $ 606,000 Manufacturing overhead applied to Work in Process 611,000 Underapplied (overapplied) manufacturing overhead $ (5,000 ) Unadjusted cost of goods sold $ 1,458,000 Underapplied (overapplied) overhead (5,000 ) Adjusted cost of goods sold $ 1,453,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

149) Tevebaugh Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $ 30,000 Estimated total manufacturing overhead at the beginning of the year $ 568,000 Estimated direct labor-hours at the beginning of the year 32,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $ 501,000 Direct labor cost $ 683,000 Actual direct labor-hours 33,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 176,000 Other manufacturing overhead costs incurred $ 420,000 Selling and administrative: Selling and administrative salaries $ 219,000 Other selling and administrative expenses $ 346,000 Cost of goods manufactured $ 1,567,000 Sales revenue $ 2,498,000 Cost of goods sold (unadjusted) $ 1,376,000 The net operating income is: (Round your intermediate calculations to 2 decimal places.) A) $892,750 B) $765,750 C) $546,750 D) $1,111,750

answer: C Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $568,000 ÷ 32,000 direct labor-hours = $17.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.75 per direct labor-hour × 33,000 direct labor-hours = $585,750 Actual manufacturing overhead incurred ($176,000 + $420,000) $ 596,000 Manufacturing overhead applied to Work in Process 585,750 Underapplied (overapplied) manufacturing overhead $ 10,250 Unadjusted cost of goods sold $ 1,376,000 Underapplied (overapplied) overhead 10,250 Adjusted cost of goods sold $ 1,386,250 Sales $ 2,498,000 Cost of goods sold (adjusted) 1,386,250 Gross margin 1,111,750 Selling and administrative expenses: Selling and administrative salaries 219,000 Other selling and administrative expenses 346,000 565,000 Net operating income $ 546,750 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

66) Plasencia Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $ 33,000 Estimated total manufacturing overhead at the beginning of the year $ 635,500 Estimated direct labor-hours at the beginning of the year 41,000 direct labor-hours Results of operations: Actual direct labor-hours 42,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 177,000 Other manufacturing overhead costs incurred $ 444,000 Selling and administrative: Selling and administrative salaries $ 280,000 Other selling and administrative expenses $ 310,000 Cost of goods manufactured $ 1,501,000 Sales revenue $ 2,704,000 Cost of goods sold (unadjusted) $ 1,416,000 The net operating income is: (Round your intermediate calculations to 2 decimal places.) A) $1,318,000 B) $1,008,000 C) $728,000 D) $1,038,000

answer: C Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $635,500 ÷ 41,000 direct labor-hours = $15.50 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $15.50 per direct labor-hour × 42,000 direct labor-hours = $651,000 Actual manufacturing overhead incurred ($177,000 + $444,000) $ 621,000 Manufacturing overhead applied to Work in Process 651,000 Underapplied (overapplied) manufacturing overhead $ (30,000 ) Unadjusted cost of goods sold $ 1,416,000 Underapplied (overapplied) overhead $ (30,000 ) Adjusted cost of goods sold $ 1,386,000 Sales $ 2,704,000 Cost of goods sold (adjusted) 1,386,000 Gross margin 1,318,000 Selling and administrative expenses: Selling and administrative salaries 280,000 Other selling and administrative expenses 310,000 590,000 Net operating income $ 728,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

97) Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040. At the end of the year, actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040. Overhead at the end of the year was: (Round your intermediate calculations to 2 decimal places.) A) $6,840 overapplied B) $6,840 underapplied C) $1,840 underapplied D) $1,840 overapplied

answer: C Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $497,040 ÷ 21,800 direct labor-hours = $22.80 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $22.80 per direct labor-hour × 21,500 direct labor-hours = $490,200 Overhead over or underapplied Actual manufacturing overhead incurred $ 492,040 Manufacturing overhead applied to Work in Process 490,200 Underapplied (overapplied) manufacturing overhead $ 1,840 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

163) Baka 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 $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600. The predetermined overhead rate for the year was closest to: A) $52.61 B) $49.91 C) $51.00 D) $51.49

answer: C Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total direct labor-hours = $239,700 ÷ 4,700 direct labor-hours = $51.00 per direct labor-hour Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

71) Tatar Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $ 37,000 Work in process $ 15,000 Results of operations: Raw materials purchased on account $ 480,000 Raw materials (all direct) requisitioned for use in production $ 434,000 How much is the ending balance in the Raw Materials inventory account? A) $37,000 B) $120,000 C) $83,000 D) $517,000

answer: C Explanation: The ending balance in Raw Materials is computed as follows: Raw Materials Balance, beginning 37,000 Raw materials used in production 434,000 Purchases 480,000 Balance, ending* 83,000 *$37,000 + $480,000 − $434,000 = $83,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

73) The following accounts are from last year's books of Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of direct materials used for the year? A) $164,000 B) $154,000 C) $132,000 D) $168,000

answer: C Explanation: The journal entry to record Issue of direct and indirect materials was entry (b) above: Work in Process 132,000 Manufacturing Overhead 22,000 Raw Materials 154,000 Direct materials are debited to Work in Process; indirect materials are debited to Manufacturing Overhead. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

139) Verrett Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $ 475,000 Raw materials (all direct) requisitioned for use in production $ 476,000 Direct labor cost $ 640,000 Manufacturing overhead: Indirect labor cost $ 174,000 Other manufacturing overhead costs incurred $ 498,000 Cost of goods manufactured $ 1,469,000 Cost of goods sold (unadjusted) $ 1,430,000 The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: A) Finished Goods 1,672,500 Work in Process 1,672,500 B) Work in Process 1,469,000 Finished Goods 1,469,000 C) Finished Goods 1,469,000 Work in Process 1,469,000 D) Work in Process 1,672,500 Finished Goods 1,672,500

answer: C Explanation: The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: Finished Goods 1,469,000 Work in Process 1,469,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

173) The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Beg Bal 4,500 8,000 4,700 Work in Process Beg Bal 3,600 21,700 5,700 8,000 7,800 Finished Goods Beg Bal 1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900 Beg Bal 2,000 11,000 Cost of Goods Sold Beg Bal 19,900 The direct labor cost was: A) $11,600 B) $19,900 C) $8,000 D) $11,000

answer: C Explanation: The key is to recognize that the 5,700 debit entry in the Work in Process account represents direct materials. The journal entry would have been: Work in Process 5,700 Manufacturing Overhead 2,300 Raw Materials 8,000 The other debit entry in the Work in Process account in the amount of $7,800 is manufacturing overhead applied because there is a corresponding credit entry for the same amount in the account Manufacturing Overhead. Work In Process Beg Bal 3,600 COGM 21,700 Direct materials 5,700 Direct labor 8,000 Manufacturing overhead applied 7,800 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

175) The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Beg Bal 4,500 8,000 4,700 Work in Process Beg Bal 3,600 21,700 5,700 8,000 7,800 Finished Goods Beg Bal 1,700 19,900 21,700 Manufacturing Overhead 2,300 7,800 3,000 2,700 Wages & Salaries Payable 19,900 Beg Bal 2,000 11,000 Cost of Goods Sold Beg Bal 19,900 The manufacturing overhead applied was: A) $2,700 B) $3,000 C) $7,800 D) $13,700

answer: C Explanation: The manufacturing overhead applied is the credit entry of $7,800 in the Manufacturing Overhead account. Manufacturing Overhead Manufacturing overhead applied 7,800 2,300 3,000 2,700 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

168) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (2) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The cost of goods sold (after adjustment for underapplied or overapplied manufacturing overhead) is: A) $58,000 B) $69,000 C) $72,000 D) $65,000

answer: C Explanation: The unadjusted cost of goods sold is the credit entry to Finished Goods which can be determined as follows: Finished Goods Bal 18,000 X (7) 62,000 15,000 15,000 = 18,000 + 62,000 − X X = 18,000 + 62,000 − 15,000 = 65,000 Finished Goods Bal 18,000 (8) 65,000 (7) 62,000 15,000 Cost of Goods Sold (8) 65,000 The balance in Manufacturing Overhead is close to Cost of Goods Sold. Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 38,000 31,000 7,000 (9) 7,000 Cost of Goods Sold (8) 65,000 (9) 7,000 72,000 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

50) Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $92,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: A) debit to Manufacturing Overhead of $92,000 B) debit to Work in Process of $90,000 C) credit to Manufacturing Overhead of $92,000 D) credit to Work in Process of $90,000

answer: C Explanation: To record application of Manufacturing Overhead to Work In Process: Work in Process $ 92,000 Manufacturing Overhead $ 92,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

54) Firlit Corporation incurred $69,000 of actual Manufacturing Overhead costs during October. During the same period, the Manufacturing Overhead applied to Work in Process was $70,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: A) debit to Work in Process of $70,000 B) credit to Work in Process of $70,000 C) debit to Manufacturing Overhead of $69,000 D) credit to Manufacturing Overhead of $69,000

answer: C Explanation: To record the incurrence of actual Manufacturing Overhead costs: Manufacturing Overhead 69,000 Accounts Payable, Cash, other asset accounts 69,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

99) Braam Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,500 hours. At the end of the year, actual direct labor-hours for the year were 9,700 hours, the actual manufacturing overhead for the year was $143,350, and manufacturing overhead for the year was underapplied by $18,220. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been: (Round your intermediate calculations to 2 decimal places.) A) $164,023 B) $125,130 C) $148,350 D) $138,350

answer: C Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied Manufacturing overhead applied = Actual manufacturing overhead - Underapplied manufacturing overhead = $143,350 - $18,220 = $125,130 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred Predetermined overhead rate = Overhead applied ÷ Amount of the allocation base incurred Predetermined overhead rate = $125,130 ÷ 9,700 direct labor-hours = $12.90 per direct labor-hour Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Estimated total manufacturing overhead = Predetermined overhead rate × Estimated total amount of the allocation base = $12.90 per direct labor-hour × 11,500 direct labor-hours = $148,350 Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

251) Bledsoe Corporation has provided the following data for the month of November: Inventories: Beginning Ending Raw materials $ 25,000 $ 21,000 Work in process $ 17,000 $ 10,000 Finished Goods $ 48,000 $ 56,000 Additional information: Raw materials purchases $ 72,000 Direct labor cost $ 92,000 Manufacturing overhead cost incurred $ 42,000 Indirect materials included in manufacturing overhead cost incurred $ 4,000 Manufacturing overhead cost applied to Work in Process $ 41,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. Required: Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold.

answer: Cost of Goods Manufactured: Direct materials: Beginning materials inventory $ 25,000 Add: Purchases of raw materials 72,000 Raw materials available for use 97,000 Deduct: Ending raw materials inventory 21,000 Raw materials used in production 76,000 Less: Indirect materials included in manufacturing overhead incurred 4,000 $ 72,000 Direct labor 92,000 Manufacturing overhead applied to Work in Process 41,000 Total manufacturing costs 205,000 Add: Beginning work in process inventory 17,000 222,000 Deduct: Ending work in process inventory 10,000 Cost of goods manufactured $ 212,000 Cost of Goods Sold Beginning finished goods inventory $ 48,000 Add: Cost of goods manufactured 212,000 Cost of goods available for sale 260,000 Deduct: Ending finished goods inventory 56,000 Unadjusted cost of goods sold 204,000 Add: Underapplied overhead 1,000 Adjusted cost of goods sold $ 205,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

210) Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Additional information: Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for July is: A) $218,000 B) $188,000 C) $203,000 D) $189,000

answer: D Explanation: Overhead over or underapplied Actual manufacturing overhead incurred $ 59,000 Manufacturing overhead applied to Work in Process 58,000 Underapplied (overapplied) manufacturing overhead $ 1,000 Finished goods inventory, beginning $ 32,000 Add: Cost of goods manufactured 203,000 Cost of goods available for sale 235,000 Deduct: Finished goods inventory, ending 47,000 Unadjusted cost of goods sold 188,000 Add: Underapplied overhead 1,000 Adjusted cost of goods sold $ 189,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

205) Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 8,500 Purchased during the month $ 38,000 Used in production $ 39,300 Labor: Direct labor-hours worked during the month 1,900 Direct labor cost incurred $ 24,510 Actual manufacturing overhead costs incurred $ 33,300 Inventories: Raw materials, May 30 ? Work in process, May 30 $ 16,937 Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a: A) credit of $5,336 to Manufacturing Overhead. B) credit of $1,660 to Manufacturing Overhead. C) debit of $5,336 to Manufacturing Overhead. D) debit of $1,660 to Manufacturing Overhead.

answer: D Explanation: Actual manufacturing overhead incurred $ 33,300 Manufacturing overhead applied to Work in Process ($18.40 per direct labor-hour × 1,900 direct labor-hours) 34,960 Underapplied (overapplied) manufacturing overhead $ (1,660 ) Manufacturing Overhead $1,660 Cost of Goods Sold $1,660 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

148) Tevebaugh Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $ 30,000 Estimated total manufacturing overhead at the beginning of the year $ 568,000 Estimated direct labor-hours at the beginning of the year 32,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $ 501,000 Direct labor cost $ 683,000 Actual direct labor-hours 33,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 176,000 Other manufacturing overhead costs incurred $ 420,000 Selling and administrative: Selling and administrative salaries $ 219,000 Other selling and administrative expenses $ 346,000 Cost of goods manufactured $ 1,567,000 Sales revenue $ 2,498,000 Cost of goods sold (unadjusted) $ 1,376,000 The cost of goods available for sale is: A) $1,376,000 B) $1,567,000 C) $1,769,750 D) $1,597,000

answer: D Explanation: Beginning finished goods inventory $ 30,000 Add: Cost of goods manufactured 1,567,000 Cost of goods available for sale $ 1,597,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

129) During March, Pendergraph Corporation incurred $60,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $62,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: A) credit to Manufacturing Overhead of $60,000 B) credit to Work in Process of $62,000 C) debit to Work in Process of $62,000 D) debit to Manufacturing Overhead of $60,000

answer: D Explanation: Manufacturing Overhead $ 60,000 Accounts Payable, Cash, or other Asset accounts $ 60,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

121) On January 1, Schaf Corporation had $23,000 of raw materials on hand. During the month, the company purchased an additional $54,000 of raw materials. During January, $50,000 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 $6,000. The journal entry to record the purchase of raw materials would include a: A) debit to Raw Materials of $73,000 B) credit to Raw Materials of $54,000 C) credit to Raw Materials of $73,000 D) debit to Raw Materials of $54,000

answer: D Explanation: Raw Materials $ 54,000 Accounts Payable $ 54,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

60) At the beginning of December, Altro Corporation had $26,000 of raw materials on hand. During the month, the Corporation purchased an additional $76,000 of raw materials. During December, $72,000 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: A) $26,000 B) $102,000 C) $76,000 D) $72,000

answer: D Explanation: Raw Materials 76,000 Accounts Payable 76,000 Work in Process 72,000 Raw Materials 72,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

82) Emigh Corporation's cost of goods manufactured for the just completed month was $146,000 and its overhead was overapplied by $5,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $37,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much was the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $144,000 B) $146,000 C) $181,000 D) $139,000

answer: D Explanation: Schedule of Cost of Goods Sold Beginning finished goods inventory $ 35,000 Add: Cost of goods manufactured 146,000 Cost of goods available for sale 181,000 Deduct: Ending finished goods inventory 37,000 Unadjusted cost of goods sold 144,000 Deduct: Overapplied overhead 5,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $ 139,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

122) On January 1, Schaf Corporation had $23,000 of raw materials on hand. During the month, the company purchased an additional $54,000 of raw materials. During January, $50,000 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 $6,000. The journal entry to record the requisition from the storeroom would include a: A) debit to Work in Process of $50,000 B) debit to Raw Materials of $50,000 C) credit to Manufacturing Overhead of $6,000 D) debit to Work in Process of $44,000

answer: D Explanation: Work in Process $ 44,000 Manufacturing Overhead $ 6,000 Raw Materials $ 50,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

77) Maysonet Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Work in Process Bal. 1/1 18,000 Credits ? Debits 520,000 Bal. 12/31 34,000 The cost of completed jobs transferred from Work in Process to Finished Goods during the year was: A) $520,000 B) $572,000 C) $538,000 D) $504,000

answer: D Explanation: Work in process inventory, 1/1 18,000 Add: Debits (Additions to work in process) 520,000 538,000 Deduct: Work in process inventory, 12/31 34,000 Cost of completed jobs transferred from Work in Process to Finished Goods 504,000 Alternatively, Work in Process Bal. 1/1 18,000 Credits (plug) 504,000 Debits 520,000 Bal. 12/31 34,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

135) Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18 Job B19 Job C11 Direct materials $ 12,000 $ 25,000 $ 18,000 Direct labor $ 8,000 $ 10,000 $ 5,000 Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19. How much is Kapanga's cost of goods manufactured for October? A) $ 50,000 B) $ 55,000 C) $ 78,000 D) $ 82,000

answer: D Explanation: Job B18 Job B19 Job C11 Direct materials $ 12,000 $ 25,000 $ 18,000 Direct labor 8,000 10,000 5,000 Manufacturing overhead (150% of direct labor cost) 12,000 15,000 7,500 Total product cost $ 32,000 $ 50,000 $ 30,500 $ 112,500 Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory Cost of goods manufactured = $112,500 + $0 - $30,500 = $82,000 Difficulty: 3 Hard Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

116) Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. 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 $76,000 and the total of the credits to the account was $66,000. Which of the following statements is true? A) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000. B) Actual manufacturing overhead incurred during the month was $66,000. C) Manufacturing overhead applied to Work in Process for the month was $76,000. D) Manufacturing overhead for the month was underapplied by $10,000.

answer: D Explanation: Manufacturing Overhead 76,000 66,000 10,000 A debit balance in Manufacturing Overhead means that manufacturing overhead was underapplied. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

178) Hardigree Corporation uses a job-order costing system. The following data relate to the just completed month's operations. Beginning balance in Work in Process $ 36,000 (1) Raw materials purchased on account $ 207,000 (2) Direct materials requisitioned for use in production $ 161,000 (3) Indirect materials requisitioned for use in production $ 42,000 (4) Direct labor wages incurred $ 87,000 (5) Indirect labor wages incurred $ 101,000 (6) Depreciation recorded on factory equipment $ 42,000 (7) Additional manufacturing overhead costs incurred $ 57,000 (8) Manufacturing overhead costs applied to jobs $ 219,000 (9) Cost of jobs completed and transferred from Work in Process to Finished Goods $ 403,000 The total amount of manufacturing overhead actually incurred was: A) $200,000 B) $284,000 C) $219,000 D) $242,000

answer: D Explanation: Manufacturing Overhead (3) 42,000 (8) 219,000 (5) 101,000 (6) 42,000 (7) 57,000 242,000 219,000 Actual manufacturing overhead costs are debited to Manufacturing Overhead. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

103) Seuell 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 4,080 $ 18,630 $ 66,240 $ 88,950 Direct labor 5,380 24,300 86,400 116,080 Manufacturing overhead applied 3,780 13,230 45,990 63,000 Total $ 13,240 $ 56,160 $ 198,630 $ 268,030 Manufacturing overhead for the month was overapplied by $12,000. The Corporation 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 manufacturing overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for December would include the following: A) debit to Finished Goods of $56,160 B) credit to Finished Goods of $56,160 C) debit to Finished Goods of $2,520 D) credit to Finished Goods of $2,520

answer: D Explanation: Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts, resulting in credits to those accounts. Manufacturing Overhead 12,000 Work in Process (6% × $12,000) 720 Finished Goods (21% × $12,000) 2,520 Cost of Goods Sold (73% × $12,000) 8,760 Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

217) Castagnola Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 880 $ 5,500 $ 23,100 $ 29,480 Direct labor 4,100 17,600 73,920 95,620 Manufacturing overhead applied 2,460 7,380 31,160 41,000 Total $ 7,440 $ 30,480 $ 128,180 $ 166,100 Manufacturing overhead for the month was overapplied 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 finished goods inventory at the end of January after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $30,660 B) $30,664 C) $30,296 D) $30,300

answer: D Explanation: Allocating overapplied manufacturing overhead decreases the balances in the inventory and cost of goods sold accounts. Finished goods inventory at the end of January after allocation of underapplied manufacturing overhead = $30,480 − [($7,380/$41,000) × $1,000] = $30,480 − (18% × $1,000) = $30,300 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

219) Stockman Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 4,070 $ 15,680 $ 42,080 $ 61,830 Direct labor 7,760 27,440 73,640 108,840 Manufacturing overhead applied 5,130 14,250 37,620 57,000 Total $ 16,960 $ 57,370 $ 153,340 $ 227,670 Manufacturing overhead for the month was overapplied 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 November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $17,050 B) $17,034 C) $16,886 D) $16,870

answer: D Explanation: Allocating overapplied manufacturing overhead reduces the balances in the inventory and cost of goods sold accounts. Work in process inventory at the end of November after allocation of overapplied manufacturing overhead = $16,960 − [($5,130/$57,000) × $1,000] = $16,960 − (9% × $1,000) = $16,870 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

102) Bosshart 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 10,670 $ 12,000 $ 81,120 $ 103,790 Direct labor 11,630 15,000 101,400 128,030 Manufacturing overhead applied 9,680 9,680 68,640 88,000 Total $ 31,980 $ 36,680 $ 251,160 $ 319,820 Manufacturing overhead for the month was underapplied by $6,000. The Corporation 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 manufacturing 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: A) credit to Work in Process of $31,980 B) credit to Work in Process of $660 C) debit to Work in Process of $31,980 D) debit to Work in Process of $660

answer: D Explanation: Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts. Work in Process (11% × $6,000) 660 Finished Goods (11% × $6,000) 660 Cost of Goods Sold (78% × $6,000) 4,680 Manufacturing Overhead 6,000 Difficulty: 3 Hard Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

29) Which of the following statements is true? I. Overhead can be applied slowly as a job is worked on. II. Overhead can be applied when the job is completed. III. Overhead should be applied to any job not completed at year-end in order to properly value the work in process inventory. A) Only statement I is true. B) Only statement II is true. C) Both statements I and II are true. D) Statements I, II, and III are all true.

answer: D Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

211) Jaquish Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 2,440 $ 7,800 $ 37,900 $ 48,140 Direct labor 3,190 12,480 60,640 76,310 Manufacturing overhead applied 3,200 6,400 30,400 40,000 Total $ 8,830 $ 26,680 $ 128,940 $ 164,450 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 finished goods inventory at the end of January after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $25,720 B) $27,653 C) $25,707 D) $27,640

answer: D Explanation: Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts. Finished goods inventory at the end of January after allocation of underapplied manufacturing overhead = $26,680 + [($6,400/$40,000) × $6,000] = $26,680 + (16% × $6,000) = $27,640 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

204) Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 8,500 Purchased during the month $ 38,000 Used in production $ 39,300 Labor: Direct labor-hours worked during the month 1,900 Direct labor cost incurred $ 24,510 Actual manufacturing overhead costs incurred $ 33,300 Inventories: Raw materials, May 30 ? Work in process, May 30 $ 16,937 Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was: A) $97,110 B) $110,600 C) $98,770 D) $100,535

answer: D Explanation: Beginning work in process inventory = $1,800 + $6,966 + $9,936 = $18,702 Direct materials used in production $ 39,300 Direct labor 24,510 Manufacturing overhead ($18.40 per direct labor-hour × 1,900 direct labor-hours) 34,960 Total manufacturing costs 98,770 Add: Beginning work in process 18,702 117,472 Deduct: Ending work in process 16,937 Cost of goods manufactured $ 100,535 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

90) Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $20,000 and, the ending balance was $36,000. Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred during the month was $111,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for May was: A) $63,000 B) $47,000 C) $79,000 D) $45,000

answer: D Explanation: Direct materials cost = Beginning raw materials inventory + Raw materials purchases - Ending raw materials - Indirect materials = $20,000 + $63,000 - $36,000 - $2,000 = $45,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

191) Hunkins Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 91,000 Beginning Ending Raw materials inventory $ 14,000 $ 20,000 Work in process inventory $ 57,000 $ 70,000 How much is the direct materials cost for the month on the Schedule of Cost of Goods Manufactured? A) $33,000 B) $39,000 C) $47,000 D) $23,000

answer: D Explanation: Direct materials: Beginning raw materials inventory $ 14,000 Add: Purchases of raw materials 33,000 Total raw materials available 47,000 Deduct: Ending raw materials inventory 20,000 Raw materials used in production 27,000 Deduct: Indirect materials included in manufacturing overhead 4,000 Direct materials $ 23,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

104) Weatherhead 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. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 4,170 $ 14,720 $ 41,920 $ 60,810 Direct labor 10,520 29,440 83,840 123,800 Manufacturing overhead applied 5,830 12,190 34,980 53,000 Total $ 20,520 $ 56,350 $ 160,740 $ 237,610 Manufacturing overhead for the month was overapplied by $3,000. The Corporation 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 manufacturing overhead applied during the month in those accounts. The work in process inventory at the end of March after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: A) $20,261 B) $20,779 C) $20,850 D) $20,190

answer: D Explanation: Ending work in process inventory after allocation of overapplied manufacturing overhead = $20,520 − [($5,830/$53,000) × $3,000] = $20,520 − (11% × $3,000) = $20,190 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

33) The journal entry to record applying overhead during the production process is: A) Manufacturing Overhead XXX Work In Process XXX B) Finished Goods XXX Manufacturing Overhead XXX C) Manufacturing Overhead XXX Finished Goods XXX D) Work In Process XXX Manufacturing Overhead XXX

answer: D Explanation: No further explanation details are available for this problem. Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

32) In a job-order costing system, which of the following events would trigger recording data on a job cost sheet? A) the purchase of direct materials B) the payment of fire insurance on the factory building C) the payment for product advertising D) none of the choices

answer: D Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

38) Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs: A) started in process during the period. B) in process during the period. C) completed and sold during the period. D) completed during the period.

answer: D Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

43) When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true? A) Work in Process will decrease. B) Cost of Goods Sold will increase. C) Net income will decrease. D) Gross margin will increase.

answer: D Explanation: No further explanation details are available for this problem. Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

145) The accounting records of Omar Corporation contained the following information for last year: Beginning Ending Direct materials inventory $ 9,000 $ 7,000 Work in process inventory $ 17,000 $ 31,000 Finished goods inventory $ 10,000 $ 15,000 Manufacturing Costs Incurred Direct materials used $ 72,000 Overhead applied $ 24,000 Direct labor cost (10,000 hours) $ 80,000 Depreciation $ 10,000 Rent $ 12,000 Taxes $ 8,000 Unadjusted cost of goods sold (does not include overapplied or underapplied overhead) $ 157,000 Selling, General, and Administrative Costs Incurred Advertising $ 35,000 Rent $ 20,000 Clerical $ 25,000 If Omar Corporation applies overhead to jobs on the basis of direct labor-hours and Job 3 took 120 hours, how much overhead should be applied to that job? (Round your intermediate calculations to 2 decimal places.) A) $960 B) $360 C) $528 D) $288

answer: D Explanation: Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $24,000 = Predetermined overhead rate × 10,000 hours Predetermined overhead rate = $24,000 ÷ 10,000 hours = $2.40 per hour Overhead applied = $2.40 per hour × 120 hours = $288 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

150) Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $ 546,000 Estimated direct labor-hours at the beginning of the year 42,000 direct labor-hours Results of operations: Actual direct labor-hours 47,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 152,000 Other manufacturing overhead costs incurred $ 454,000 Cost of goods manufactured $ 1,569,000 Cost of goods sold (unadjusted) $ 1,458,000 The total amount of manufacturing overhead applied to production is: A) $1,755,000 B) $546,000 C) $606,000 D) $611,000

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $546,000 ÷ 42,000 direct labor-hours = $13.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.00 per direct labor-hour × 47,000 direct labor-hours = $611,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

65) Tusa Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $638,250 Estimated direct labor-hours at the beginning of the year 37,000 direct labor-hours Results of operations: Actual direct labor-hours 34,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 148,000 Other manufacturing overhead costs incurred $ 450,000 Cost of goods manufactured $ 1,611,000 Cost of goods sold (unadjusted) $ 1,518,000 The adjusted Cost of Goods Sold for the year is: (Round your intermediate calculations to 2 decimal places.) A) $1,518,000 B) $1,506,500 C) $1,642,000 D) $1,529,500

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $638,250 ÷ 37,000 direct labor-hours = $17.25 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.25 per direct labor-hour × 34,000 direct labor-hours = $586,500 Actual manufacturing overhead incurred ($148,000 + $450,000) $ 598,000 Manufacturing overhead applied to Work in Process 586,500 Underapplied (overapplied) manufacturing overhead $ 11,500 Unadjusted cost of goods sold $ 1,518,000 Underapplied (overapplied) overhead 11,500 Adjusted cost of goods sold $ 1,529,500 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing; Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

167) The following partially completed T-accounts are for Stanford Corporation: Raw Materials Bal 7,000 (2) 24,000 (1) 19,000 Work In Process Bal 11,000 (7) ? (2) 15,000 (4) 18,000 (6) 31,000 Finished Goods Bal 18,000 (7) 62,000 15,000 Manufacturing Overhead (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Accumulated Depreciation—Factory Bal 82,000 (3) 16,000 Sales Salaries Expense (4) 11,000 Accounts Payable Bal (1) 19,000 (5) 5,000 Salaries and Wages Payable Bal 7,000 (4) 37,000 The cost of goods manufactured is: A) $82,000 B) $64,000 C) $71,000 D) $62,000

answer: D Explanation: The amount transferred from Work In Process to Finished Goods in entry (7) is the cost of goods manufactured. Finished Goods 62,000 Work In Process 62,000 Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

142) Niles Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $ 47,000 Work in process $ 20,000 Estimated total manufacturing overhead at the beginning of the year $ 646,250 Estimated direct labor-hours at the beginning of the year 47,000 direct labor-hours Results of operations: Raw materials purchased on account $ 538,000 Raw materials (all direct) requisitioned for use in production $ 535,000 Direct labor cost $ 699,000 Actual direct labor-hours 37,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 134,000 Other manufacturing overhead costs incurred $ 453,000 Cost of goods manufactured $ 1,568,000 The ending balance in the Work in Process inventory account is: (Round your intermediate calculations to 2 decimal places.) A) $214,225 B) $154,750 C) $174,750 D) $194,750

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $646,250 ÷ 47,000 direct labor-hours = $13.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.75 per direct labor-hour × 37,000 direct labor-hours = $508,750 Work In Process Balance, beginning 20,000 Cost of goods manufactured 1,568,000 Direct materials 535,000 Direct labor 699,000 Manufacturing overhead applied 508,750 Balance, ending* 194,750 *$20,000 + ($535,000 + $699,000 + $508,750) − $1,568,000 = $20,000 + ($1,742,750) − $1,568,000 = $194,750 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

151) Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $ 546,000 Estimated direct labor-hours at the beginning of the year 42,000 direct labor-hours Results of operations: Actual direct labor-hours 47,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 152,000 Other manufacturing overhead costs incurred $ 454,000 Cost of goods manufactured $ 1,569,000 Cost of goods sold (unadjusted) $ 1,458,000 Manufacturing overhead is overapplied or underapplied by: A) $186,000 Underapplied B) $5,000 Underapplied C) $186,000 Overapplied D) $5,000 Overapplied

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $546,000 ÷ 42,000 direct labor-hours = $13.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.00 per direct labor-hour × 47,000 direct labor-hours = $611,000 Actual manufacturing overhead incurred ($152,000 + $454,000) $ 606,000 Manufacturing overhead applied to Work in Process 611,000 Underapplied (overapplied) manufacturing overhead $ (5,000 ) Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

55) Brendal Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $693,000 Estimated direct labor-hours at the beginning of the year 42,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $ 525,000 Direct labor cost $ 690,000 Actual direct labor-hours 49,000 direct labor-hours Manufacturing Overhead: Indirect labor cost $ 138,000 Other manufacturing overhead costs incurred $ 506,000 How much is the total manufacturing cost added to Work in Process during the year? (Round your intermediate calculations to 2 decimal places.) A) $1,215,000 B) $1,803,000 C) $1,498,500 D) $2,023,500

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $693,000 ÷ 42,000 direct labor-hours = $16.50 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $16.50 per direct labor-hour × 49,000 direct labor-hours = $808,500 Direct materials $ 525,000 Direct labor 690,000 Manufacturing overhead applied 808,500 Total manufacturing cost $ 2,023,500 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

113) Forbes Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the period, the Corporation estimated manufacturing overhead would be $18,000 and direct labor-hours would be 15,000. The actual figures were $19,500 for manufacturing overhead and 16,000 direct labor-hours. The cost records for the period will show: (Round your intermediate calculations to 2 decimal places.) A) overapplied manufacturing overhead of $300 B) overapplied manufacturing overhead of $1,500 C) underapplied manufacturing overhead of $1,500 D) underapplied manufacturing overhead of $300

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $18,000 ÷ 15,000 direct labor-hours = $1.20 per direct labor-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 19,500 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 1.20 per direct labor-hour Actual total amount of the allocation base (b) 16,000 direct labor-hours Manufacturing overhead applied (a) × (b) $ 19,200 Underapplied (overapplied) manufacturing overhead $ 300 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

18) In the Schedule of Cost of Goods Sold, Cost of goods available for sale = Ending finished goods inventory + Cost of goods manufactured.

answer: FALSE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

20) On a manufacturing company's income statement, direct labor is separately listed as an expense.

answer: FALSE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

114) Rist Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation estimated that it would incur $255,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The Corporation actually worked 105,000 machine-hours and incurred $270,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.) A) $15,000 overapplied B) $15,000 underapplied C) $2,250 overapplied D) $2,250 underapplied

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $255,000 ÷ 100,000 machine-hours = $2.55 per machine-hour Overhead over or underapplied Actual manufacturing overhead incurred $ 270,000 Manufacturing overhead applied to Work in Process: Predetermined overhead rate (a) $ 2.55 per machine-hour Actual total amount of the allocation base (b) 105,000 machine-hours Manufacturing overhead applied (a) × (b) $ 267,750 Underapplied (overapplied) manufacturing overhead $ 2,250 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

158) Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $ 157,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 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 applied manufacturing overhead for the year is closest to: (Round your intermediate calculations to 2 decimal places.) A) $162,682 B) $155,995 C) $158,789 D) $159,842

answer: D Explanation: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $157,050 ÷ 4,500 machine-hours = $34.90 per machine-hour Manufacturing overhead applied = Predetermined overhead rate × Actual amount of the allocation base = $34.90 per machine-hour × 4,580 machine-hours = $159,842 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

131) Tyare Corporation had the following inventory balances at the beginning and end of May: May 1 May 30 Raw materials $ 25,500 $ 30,000 Finished Goods $ 75,000 $ 66,000 Work in Process $ 13,500 $ 16,500 During May, $58,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,050 of direct materials cost. The Corporation incurred $42,000 of actual manufacturing overhead cost during the month and applied $39,600 in manufacturing overhead cost. The raw materials purchased during May totaled: A) $58,500 B) $67,500 C) $54,000 D) $63,000

answer: D Explanation: Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory $58,500 = $25,500 + Purchases of raw materials - $30,000 Purchases of raw materials = $58,500 - $25,500 + $30,000 = $63,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

76) Compute the amount of raw materials used during November if $30,000 of raw materials were purchased during the month and if the inventories were as follows: Inventories Balance November 1 Balance November 30 Raw materials $ 7,000 $ 4,000 Work in process $ 6,000 $ 7,500 Finished goods $ 10,000 $ 12,000 A) $31,500 B) $29,500 C) $27,000 D) $33,000

answer: D Explanation: Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory Raw materials used in production = $7,000 + $30,000 - $4,000 = $33,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

199) Boursaw Corporation has provided the following data concerning last month's operations. Purchases of raw materials $ 33,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 78,000 Underapplied overhead $ 5,000 Beginning Ending Raw materials inventory $ 10,000 $ 15,000 Work in process inventory $ 56,000 $ 72,000 Finished goods inventory $ 41,000 $ 49,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $136,000 B) $185,000 C) $144,000 D) $141,000

answer: D Explanation: Schedule of Cost of Goods Manufactured Schedule of Cost of Goods Sold Beginning finished goods inventory $ 41,000 Add: Cost of goods manufactured 144,000 Cost of goods available for sale 185,000 Deduct: Ending finished goods inventory 49,000 Unadjusted cost of goods sold 136,000 Deduct: Overapplied overhead 0 Add: Underapplied overhead 5,000 Adjusted cost of goods sold $ 141,000 Difficulty: 2 Medium Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

202) Vogel Corporation's cost of goods manufactured last month was $136,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $48,000. Overhead was overapplied by $6,000. Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $123,000 B) $171,000 C) $136,000 D) $117,000

answer: D Explanation: Schedule of Cost of Goods Sold Beginning finished goods inventory $ 35,000 Add: Cost of goods manufactured 136,000 Cost of goods available for sale 171,000 Deduct: Ending finished goods inventory 48,000 Unadjusted cost of goods sold 123,000 Deduct: Overapplied overhead 6,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $ 117,000 Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

141) Niles Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $ 47,000 Work in process $ 20,000 Estimated total manufacturing overhead at the beginning of the year $ 646,250 Estimated direct labor-hours at the beginning of the year 47,000 direct labor-hours Results of operations: Raw materials purchased on account $ 538,000 Raw materials (all direct) requisitioned for use in production $ 535,000 Direct labor cost $ 699,000 Actual direct labor-hours 37,000 direct labor-hours Manufacturing overhead: Indirect labor cost $ 134,000 Other manufacturing overhead costs incurred $ 453,000 Cost of goods manufactured $ 1,568,000 How much is the ending balance in the Raw Materials inventory account? A) $97,000 B) $585,000 C) $47,000 D) $50,000

answer: D Explanation: The ending balance in Raw Materials is computed as follows: Raw Materials Balance, beginning 47,000 Raw materials used in production 535,000 Purchases 538,000 Balance, ending* 50,000 *$47,000 + $538,000 − $535,000 = $50,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

56) Firebaugh Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $ 520,000 Raw materials (all direct) requisitioned for use in production $ 467,000 What is the journal entry to record raw materials used in production? A) Raw Materials 520,000 Work In Process 520,000 B) Raw Materials 467,000 Work In Process 467,000 C) Work in Process 520,000 Raw Materials 520,000 D) Work in Process 467,000 Raw Materials 467,000

answer: D Explanation: The journal entry to record the raw materials used in production is: Work in Process 467,000 Raw Materials 467,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

137) Verrett Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $ 475,000 Raw materials (all direct) requisitioned for use in production $ 476,000 Direct labor cost $ 640,000 Manufacturing overhead: Indirect labor cost $ 174,000 Other manufacturing overhead costs incurred $ 498,000 Cost of goods manufactured $ 1,469,000 Cost of goods sold (unadjusted) $ 1,430,000 What is the journal entry to record raw materials used in production? A) Work in Process 475,000 Raw Materials 475,000 B) Raw Materials 475,000 Work in Process 475,000 C) Raw Materials 476,000 Work in Process 476,000 D) Work in Process 476,000 Raw Materials 476,000

answer: D Explanation: The journal entry to record the raw materials used in production is: Work in Process 476,000 Raw Materials 476,000 Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

154) Echher Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $218,000 and credited for $218,500. The ending balance in the Finished Goods inventory account was $13,000. At the end of the year, manufacturing overhead was overapplied by $36,700. If the applied manufacturing overhead was $223,900, the actual manufacturing overhead cost for the year was: A) $200,700 B) $260,600 C) $200,200 D) $187,200

answer: D Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied −$36,700 = Actual manufacturing overhead - $223,900 Actual manufacturing overhead = $223,900 - $36,700 = $187,200 Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

95) In the Vasquez Corporation, any overapplied or underapplied manufacturing overhead is closed out to Cost of Goods Sold. Last year, the Corporation incurred $27,000 in actual manufacturing overhead cost, and applied $29,000 of manufacturing overhead cost to jobs. The beginning and ending balances of Finished Goods were equal, and the Corporation's Cost of Goods Manufactured for the year totaled $71,000. Given this information, Cost of Goods Sold, after adjustment for any overapplied or underapplied manufacturing overhead, for the year must have been: A) $98,000 B) $73,000 C) $71,000 D) $69,000

answer: D Explanation: Underapplied (overapplied) manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied = $27,000 - $29,000 = $2,000 overapplied Cost of goods manufactured = Total manufacturing costs = $71,000 Unadjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory Beginning finished goods inventory = Ending finished goods inventory Unadjusted cost of goods sold = Ending finished goods inventory + Cost of goods manufactured - Ending finished goods inventory Unadjusted cost of goods sold = Cost of goods manufactured = $71,000 Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied overhead - Overapplied overhead Adjusted cost of goods sold = $71,000 - $2,000 = $69,000 Difficulty: 3 Hard Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold; Underapplied and Overapplied Overhead Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

16) Assume that a company closes out any manufacturing overhead overapplied or underapplied to cost of goods sold. Then in the Schedule of Cost of Goods Sold, Adjusted cost of goods sold = Unadjusted cost of goods sold + Overapplied overhead - Underapplied overhead.

answer: FALSE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

17) In the Schedule of Cost of Goods Manufactured, Total raw materials available = Ending raw materials inventory + Purchases of raw materials.

answer: FALSE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

14) The $10,000 balance in the T-account below represents overapplied manufacturing overhead for the period. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000

answer: FALSE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing; Underapplied and Overapplied Overhead Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system.; 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

4) If a company uses a predetermined overhead rate, actual manufacturing overhead costs of a period will be recorded in the Manufacturing Overhead account and will be recorded on the job cost sheets.

answer: FALSE Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

5) The journal entry for cost of goods manufactured includes the costs of units that are partially completed.

answer: FALSE Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

7) The following entry would be used to record the transfer of $40,000 of direct material and $10,000 of indirect material from the storeroom to production: Direct Materials 40,000 Indirect Materials 10,000 Raw Materials 50,000

answer: FALSE Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

24) If a company closes any underapplied or overapplied manufacturing overhead to the Cost of Goods Sold account, then Cost of Goods Sold will be debited if manufacturing overhead is overapplied for the period.

answer: FALSE Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

26) Two of the reasons why manufacturing overhead may be underapplied are: (1) the estimated total manufacturing overhead cost may have been too high; and (2) the estimated total amount of the allocation base may have been too low.

answer: FALSE Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

27) If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied, then manufacturing overhead would be considered to be overapplied.

answer: FALSE Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

28) The entire difference between the actual manufacturing overhead cost for a period and the applied manufacturing overhead cost is typically closed to the Work In Process account.

answer: FALSE Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

255) Testor Products uses a job-order costing system with a predetermined overhead rate based on machine-hours. The company closes out any underapplied or overapplied overhead to Cost of Goods Sold. Required: If overhead is overapplied, what adjustment does the company make to Cost of Goods Sold? Is Cost of Goods Sold increased or decreased? Why?

answer: If overhead is overapplied, too much overhead has been applied to inventories and they are therefore overcosted. Since these excess costs flow through to Cost of Goods Sold when finished goods are sold, it is necessary to reduce Cost of Goods Sold in order to eliminate this overstatement of costs. Difficulty: 1 Easy Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

15) In the Schedule of Cost of Goods Manufactured, Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory.

answer: TRUE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

19) In the Schedule of Cost of Goods Sold, Unadjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured − Ending finished goods inventory.

answer: TRUE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

21) In the Schedule of Cost of Goods Manufactured, Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials − Ending raw materials inventory.

answer: TRUE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

22) The schedule of cost of goods manufactured contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and it summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.

answer: TRUE Difficulty: 1 Easy Topic: Schedule of Cost of Goods Manufactured and Cost of Goods Sold Learning Objective: 03-03 Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

2) The absorption cost approach provides for the absorption of all manufacturing costs, fixed and variable, into units of product.

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

6) Advertising costs should NOT be charged to the Manufacturing Overhead account.

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

3) The following entry would be used to record depreciation on manufacturing equipment: Manufacturing Overhead XXX Accumulated Depreciation XXX

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

10) Entry (1) in the below T-account represents the purchase rather than use of raw materials. Raw Materials Bal. 10,000 (2) 60,000 (1) 70,000 Bal. 20,000

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

12) Entry (4) in the T-account below represents raw materials requisitioned for use in production. Raw Materials Bal. 15,000 (4) 87,000 (3) 94,000 Bal. 22,000

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

13) Entry (4) in the below T-account could represent the cost of property taxes and insurance incurred on the factory. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000

answer: TRUE Difficulty: 1 Easy Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-02 Use T-accounts to show the flow of costs in a job-order costing system. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

1) When raw materials are purchased, they are recorded as an asset.

answer: TRUE Difficulty: 2 Medium Topic: The Flow of Costs in Job-Order Costing Learning Objective: 03-01 Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

25) A credit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead was overapplied.

answer: TRUE Difficulty: 2 Medium Topic: Underapplied and Overapplied Overhead Learning Objective: 03-04 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;