Question 1

The following data are available for Jackson Company.
 $\begin{array}{llcc}
  \text { Annual estimated manufacturing overhead } &\$70,000 \
 \text {  Actual manufacturing overhead in May} &16,200\
 \text { Annual estimated direct labor hours } &25,000\
 \text {Actual direct labor hours in May  } &5,700\
\end{array}$
 Required:
a.Compute the predetermined rate based on direct labor hours.
b.Prepare the journal entry to record the applied overhead for the month of May.

Accepted Answer

The answer of The following data are available for Jackson...

Question 2

Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods inventory.
[4]Work in process inventory.
[5]Raw materials inventory.
[6]Factory supplies inventory.
[7]Overhead applied
[8]Accumulated depreciation factory equipment
[9]Accounts payable.
[10]Payroll
[11]Utilities payable
[12]Sales.
[13]Raw materials purchases.
[14]Overhead-control.
[15]Cost of goods sold.
Indicate the account(s) to be debited and credited to record the following transactions.
-Purchased raw materials on account.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods...

Question 3

If direct labor for the month is $30,000,overhead is applied based on direct labor,annual overhead is estimated to be $500,000,and annual direct labor is estimated to be $800,000,what is the entry to apply overhead to production?

Accepted Answer

A) Debit Work-in-Process Inventory $18,750; credit Payroll $18,750 
B) Debit Overhead-Applied $18,750; credit Work-in-Process Inventory $18,750 
C) Debit Work-in-Process Inventory $18,750; credit Overhead-Applied $18,750 
D) Debit Work-in-Process Inventory $30,000; credit Overhead-Applied $30,000

Question 4

All expenses are listed on the income statement of a manufacturer.

Accepted Answer

A) True 
 B)False

Question 5

Finished goods inventory includes the total costs of manufacturing a product.

Accepted Answer

A) True 
 B)False

Question 6

If direct labor for the month is $40,000,overhead is applied based on direct labor,annual overhead is $600,000,and annual direct labor is $1,000,000,what is the entry to charge direct labor to production?

Accepted Answer

A) Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 
B) Debit Overhead-Applied $40,000; credit Work-in-Process Inventory $40,000 
C) Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 
D) Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

Question 7

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement(s) on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \begin{array} { l } 
\text { Factory } \
\text { equipment }
\end{array} & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 8

From the following transactions,prepare the appropriate general journal entries for the month of April.
a.Raw materials costing $60,000 were issued from the storeroom.
b.Direct labor of $53,000 was charged to production.
c.Indirect labor costs of $17,000 were incurred.
d.Overhead was applied at the rate of 40% of direct labor dollars.
e.Completed products costing $42,000 were transferred to finished goods.
f.Products costing $32,000 were sold.

Accepted Answer

The answer of From the following transactions,prepare the appropriate general...

Question 9

The steps of the accounting cycle for a manufacturing company are different from those used for a merchandise company.

Accepted Answer

A) True 
 B)False

Question 10

Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods inventory.
[4]Work in process inventory.
[5]Raw materials inventory.
[6]Factory supplies inventory.
[7]Overhead applied
[8]Accumulated depreciation factory equipment
[9]Accounts payable.
[10]Payroll
[11]Utilities payable
[12]Sales.
[13]Raw materials purchases.
[14]Overhead-control.
[15]Cost of goods sold.
Indicate the account(s) to be debited and credited to record the following transactions.
-Sold products on account.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods...

Question 11

There was no accrual for the direct labor at the end of the year.This error will cause:

Accepted Answer

A) the cost of goods manufactured to be overstated. 
B) the cost of goods sold to be overstated. 
C) the net income to be understated. 
D) None of these answers is correct.

Question 12

Estimated manufacturing overhead costs were $40,000 and the number of estimated machine hours was 10,000.Actual overhead costs were $40,500 and the actual number of machine hours used was 10,200.Based on machine hours,the overhead application rate per hour is:

Accepted Answer

A) $3.97. 
B) $3.92. 
C) $4.00. 
D) $4.05.

Question 13

Overhead may be applied based on direct labor hours or machine hours.

Accepted Answer

A) True 
 B)False

Question 14

Direct labor includes the wages of:

Accepted Answer

A) an hourly worker producing the product. 
B) the shop foreman. 
C) maintenance workers. 
D) administrators.

Question 15

Which inventory account consists of products currently being processed?

Accepted Answer

A) Finished Goods Inventory 
B) Raw Material Inventory 
C) Manufacturing Overhead Inventory 
D) Work-in-Process Inventory

Question 16

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement(s) on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Raw materials } & & & & \
\text { inventory } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 17

Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods inventory.
[4]Work in process inventory.
[5]Raw materials inventory.
[6]Factory supplies inventory.
[7]Overhead applied
[8]Accumulated depreciation factory equipment
[9]Accounts payable.
[10]Payroll
[11]Utilities payable
[12]Sales.
[13]Raw materials purchases.
[14]Overhead-control.
[15]Cost of goods sold.
Indicate the account(s) to be debited and credited to record the following transactions.
-Transferred completed products to finished goods.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Given the following accounts:
[1]Expense accounts.
[2]Accounts receivable
[3]Finished goods...

Question 18

During the week ended November 30,total factory payroll incurred was $6,000.Of this total,80% was for direct labor.The entry to record the payroll distribution would include:

Accepted Answer

A) debit Work-in-Process Inventory for $4,800 and Overhead-Control for $1,200. 
B) debit Work-in-Process Inventory for $6,000. 
C) debit Work-in-Process Inventory for $4,800 and Overhead-Applied for $1,200. 
D) debit Work-in-Process Inventory for $4,800 and Indirect Labor Expense for $1,200.

Question 19

When actual costs are not known until the end of the month,an estimated application rate should be determined so that the total weekly costs can be applied.

Accepted Answer

A) True 
 B)False

Question 20

Calculate the cost of goods sold when beginning finished goods inventory equals $70,000,ending finished goods inventory $85,000,and cost of goods manufactured $600,000.

Accepted Answer

A) $615,000 
B) $445,000 
C) $685,000 
D) $585,000

Exam 25: Manufacturing Accounting

If direct labor for the month is $30,000,overhead is applied based on direct labor,annual overhead is estimated to be $500,000,and annual direct labor is estimated to be $800,000,what is the entry to apply overhead to production?

All expenses are listed on the income statement of a manufacturer.

Finished goods inventory includes the total costs of manufacturing a product.

If direct labor for the month is $40,000,overhead is applied based on direct labor,annual overhead is $600,000,and annual direct labor is $1,000,000,what is the entry to charge direct labor to production?

The steps of the accounting cycle for a manufacturing company are different from those used for a merchandise company.

There was no accrual for the direct labor at the end of the year.This error will cause:

Estimated manufacturing overhead costs were $40,000 and the number of estimated machine hours was 10,000.Actual overhead costs were $40,500 and the actual number of machine hours used was 10,200.Based on machine hours,the overhead application rate per hour is:

Overhead may be applied based on direct labor hours or machine hours.

Direct labor includes the wages of:

Which inventory account consists of products currently being processed?

During the week ended November 30,total factory payroll incurred was $6,000.Of this total,80% was for direct labor.The entry to record the payroll distribution would include:

When actual costs are not known until the end of the month,an estimated application rate should be determined so that the total weekly costs can be applied.

Calculate the cost of goods sold when beginning finished goods inventory equals $70,000,ending finished goods inventory $85,000,and cost of goods manufactured $600,000.