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Exam 2: Job-Order Costing: Calculating Unit Production Costs

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Question 71

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

A) debit to Manufacturing Overhead of $65,000
B) credit to Manufacturing Overhead of $65,000
C) credit to Work in Process of $60,000
D) debit to Work in Process of $60,000

E) A) and D)
F) All of the above

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Question 72

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CR Corporation has the following estimated costs for the next year: CR Corporation estimates that 20,000 labor-hours will be worked during the year.If overhead is applied on the basis of direct labor-hours,the overhead rate per hour will be:

A) $2.25
B) $3.25
C) $3.45
D) $4.70

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

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Question 73

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Job 397 was recently completed.The following data have been recorded on its job cost sheet: The company applies manufacturing overhead on the basis of direct labor-hours.The predetermined overhead rate is $37 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

Killian Corporation began operations on January 1.The predetermined overhead rate was set at $6.00 per direct labor-hour.Debits to Work in Process for the year totaled $550,000.Credits to Work in Process totaled $480,000.Analysis of the Corporation's records indicate that direct labor cost totaled $250,000 for the year,which represents 20,000 direct labor-hours. If the actual manufacturing overhead cost for the year totaled $145,000,then overhead was:

Indirect materials are charged to specific jobs.

In July,Essinger Inc.incurred $72,000 of direct labor costs and $3,000 of indirect labor costs.The journal entry to record the accrual of these wages would include a:

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

Parsons Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.Last year,Parsons Corporation incurred $250,000 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that overhead was overapplied $12,000 for the year.If the predetermined overhead rate was $8.00 per direct labor-hour,how many hours did the Corporation work during the year?

During October,Beidleman Inc.transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000.The journal entries to record these transactions would include a:

Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost.Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month.During May,the following transactions were recorded by the company: The balance on May 1 in the Raw Materials inventory account was:

Messana Corporation reported the following data for the month of August: The cost of goods manufactured for August is:

Meyers Corporation had the following inventory balances at the beginning and end of November: During November,$39,000 in raw materials (all direct materials) were drawn from inventory and used in production.The company's predetermined overhead rate was $8 per direct labor-hour,and it paid its direct labor workers $10 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 $4,700 of direct materials cost.The Corporation incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. The actual direct labor-hours worked during November totaled:

During May at Shatswell Corporation,$57,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $7,000.The journal entry to record this requisition would include a debit to Manufacturing Overhead of:

The Commonwealth Company uses a job-order costing system and applies manufacturing overhead cost to jobs using a predetermined overhead rate based on the cost of materials used in production.At the beginning of the year,the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost,$186,000;direct materials cost,$155,000.The following transactions took place during the year (all purchases and services were acquired on account): a.Raw materials purchased,$96,000. b.Raw materials requisitioned for use in production (all direct materials),$88,000. c.Utility bills incurred in the factory,$17,000. d.Costs for salaries and wages incurred as follows: e.Maintenance costs incurred in the factory,$12,000. f.Advertising costs incurred,$98,000. g.Depreciation recorded for the year,$75,000 (75 percent relates to factory assets and the remainder relates to selling,general,and administrative assets). h.Rental cost incurred on buildings,$80,000 (80 percent of the space is occupied by the factory,and 20 percent is occupied by sales and administration). i.Miscellaneous selling,general,and administrative costs incurred,$12,000. j.Manufacturing overhead cost was applied to jobs. k.Cost of goods manufactured for the year,$480,000. l.Sales for the year (all on account)totaled $900,000.These goods cost $550,000 to manufacture. Required: Prepare journal entries to record the information above.Key your entries by the letters a through l.

On August 1,Shead Corporation had $35,000 of raw materials on hand.During the month,the company purchased an additional $56,000 of raw materials.During August,$69,000 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.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 August total:

The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job,the actual direct labor cost of the job,and the manufacturing overhead cost applied to the job.

The following entry would be used to record depreciation on manufacturing equipment:

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