Exam 3: Systems Design: Job-Order Costing

Niglio 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. Manufacturing overhead for the month was underapplied by $10,000. 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. The finished goods inventory at the end of December after allocation of any underapplied or overapplied overhead for the month is closest to:

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company. At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold. -The manufacturing overhead applied is:

Alvernaz 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 $2,000. 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. -The journal entry to record the allocation of any underapplied or overapplied overhead for April would include the following:

Job 484 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 $24 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

During December, Ketchum Corporation purchased $64,000 of raw materials on credit to add to its raw materials inventory. A total of $80,000 of raw materials was requisitioned from the storeroom for use in production. These requisitioned raw materials included $7,000 of indirect materials. Required: Prepare journal entries to record the purchase of materials and their use in production.

Baken 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 $172,140 and 3,800 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $171,000 and actual direct labor-hours were 3,880. -The applied manufacturing overhead for the year was closest to:

In a job-order costing system, the entry to record depreciation on manufacturing equipment would include:

Weisinger Corporation has provided the following data for the month of January: Required: Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

Job 827 was recently completed. The following data have been recorded on its job cost sheet: The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct labor cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company: -The amount of direct materials cost in the August 31 Work in Process inventory account was:

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company. At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold. -The cost of direct materials used is:

Dasilva Company had only one job in process on May 1. The job had been charged with $1,400 of direct materials, $6,192 of direct labor, and $5,712 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $11.90 per direct labor-hour. During May, the following activity was recorded: Work in process inventory on May 30 contains $4,773 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 overhead cost for the month would include a:

Rappaport Corporation reported the following data for the month of February: -The cost of goods manufactured for February is:

Brabo Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 15,700 hours. At the end of the year, actual direct labor-hours for the year were 16,700 hours, the actual manufacturing overhead for the year was $352,960, and manufacturing overhead for the year was overapplied by $27,800. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

Job 607 was recently completed. The following data have been recorded on its job cost sheet: The company 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 607 would be:

Simplex Company has the following estimated costs for next year: Simplex estimates that 10,000 direct labor and 16,000 machine-hours will be worked during the year. If overhead is applied on the basis of machine-hours, the overhead rate per hour will be:

Munos Publishing Company uses a job-order costing system to collect costs related to the manufacture of specialty publications for corporate training. -What journal entry would Munos make to record the completion of Job KN668 at a total cost of $7,600?

Mcgarey 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. Manufacturing overhead for the month was underapplied by $12,000. 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. -The cost of goods sold for November after allocation of any underapplied or overapplied overhead for the month is closest to:

Roofe 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. Manufacturing overhead for the month was underapplied by $2,000. 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. -The cost of goods sold for October after allocation of any underapplied or overapplied overhead for the month is closest to:

Babbel 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 38,000 machine-hours and incur $266,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, $300,000. Raw materials were requisitioned for use in production, $297,000 $(281,000 direct and $16,000 indirect). The following employee costs were incurred: direct labor, $389,000; indirect labor, $62,000; and administrative salaries, $176,000. Selling costs, $160,000. 0 Factory utility costs, $19,000. Depreciation for the year was $143,000 of which $137,000 is related to factory operations and $6,000 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 $1,283,000. Required: a. Prepare a schedule of cost of goods manufactured in good form. b. Was the overhead underapplied or overapplied? By how much? c. Prepare an income statement for the year in good form. The company closes any underapplied or overapplied overhead to Cost of Goods Sold.