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Exam 3: Job-Order Costing: Cost Flows and External Reporting

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Question 161

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Tyare Corporation had the following inventory balances at the beginning and end of May: 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

E) None of the above
F) A) and D)

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Question 162

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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?

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a. Overhead over or underappli...

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Question 163

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Chavez Corporation reported the following data for the month of July: Inventories: Additional information: 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:

Stockman Incorporated 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. 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:

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. Manufacturing overhead for the month was overapplied by $7,850.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.

Tiehen Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold. Its balance sheet on April 1 appears below: Summaries of the transactions completed during April appear below: Required:Complete the spreadsheet below. (Negative or Deductible amounts should be entered with a minus sign.)

Tyare Corporation had the following inventory balances at the beginning and end of May: 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:

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

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:

During March, Zea Incorporated 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:

Castagnola Incorporated 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. 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:

Frankin Corporation has provided the following data concerning last month's operations. How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured?

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 $241,800 and 6,800 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $243,400 and actual direct labor-hours were 5,300.The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

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?