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Exam 4: Job-Order Costing

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Question 81

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When a job is completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a debit to Work in Process.

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B) False

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Question 82

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Pirkl Corporation has provided the following data for the month of March: Required: Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold.

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Question 83

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Alden Company recorded the following transactions for the just completed month. The company had no beginning inventories. (a) $72,000 in raw materials were purchased for cash. (b) $67,000 in raw materials were requisitioned for use in production. Of this amount, $56,000 was for direct materials and the remainder was for indirect materials. (c) Total labor wages of $112,000 were incurred and paid in cash. Of this amount, $94,000 was for direct labor and $18,000 was for indirect labor. (d) Additional manufacturing overhead costs of $108,000 were incurred and paid in cash. (e) Manufacturing overhead costs of $130,000 were applied to jobs using the company's predetermined overhead rate. (f) All of the jobs worked on during the month were completed and shipped to customers. (g) The underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold. Required: a. Post the above transactions to T-accounts. b. Determine the cost of goods manufactured. c. Determine the cost of goods sold (after closing Manufacturing Overhead).

Franchi Inc. has provided the following data for the month of April. 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 $5,000. 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 April after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

The amount of direct labor cost in the November 30 Work in Process inventory was:

Kaleohano 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 $62,000 and the total of the credits to the account was $73,000. Which of the following statements is true?

Which of the following entries would record correctly the monthly salaries earned by the top management of a manufacturing company?

There are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves allocation of the balance among several accounts, whereas the other closes any balance directly to:

Overapplied manufacturing overhead means that:

Manufacturing overhead is overapplied if actual manufacturing overhead costs for a period are greater than the amount of manufacturing overhead cost that was charged to Work in Process.

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

Longstaff 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. Manufacturing overhead for the month was overapplied by $5,000. 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:

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $39,000 and at the end of the month was $47,000. The cost of goods manufactured for the month was $188,000. The actual manufacturing overhead cost incurred was $71,000 and the manufacturing overhead cost applied to Work in Process was $67,000. The adjusted cost of goods sold that would appear on the income statement for July is:

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:

Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 593 would be:

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

Bakerston Company 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: 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.

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

Karpel Inc. has provided the following data for the month of April. 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 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 finished goods inventory at the end of April after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a: