Exam 3: Product Costing and Cost Accumulation in a Batch Production Environment

Use the following labor budget data for Roy & Miller Accounting, LLP to answer the following Questions The budgeted overhead cost for the year is $1,260,000. The company has estimated that one-third of the budgeted over¬head cost is incurred to support the firm’s two partners, and two-thirds goes to support the staff accountants. The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material, -What is the overhead rate based on a single cost driver (rounded to the nearest percentage?

When underapplied or overapplied manufacturing overhead is prorated, amounts can be assigned to which of the following accounts?

Which of the following statements is true?

Under- or overapplied manufacturing overhead at year-end is most commonly:

Throughout the accounting period, the credit side of the Manufacturing Overhead account is used to accumulate:

Bartlett Corporation, which began operations on January 1 of the current year, reported the following information: Bartlett uses a normal cost system and applies manufacturing overhead to jobs on the basis of direct labor cost. A 60% markup is added to the cost of completed production when finished goods are sold. On December 31, job no. 18 was the only job that remained in production. That job had direct-material and direct-labor charges of $16,500 and $36,000, respectively. Required: A. Determine the company's predetermined overhead rate. B. Determine the amount of under- or overapplied overhead. Be sure to label your answer. C. Compute the amount of direct materials used in production. D. Calculate the balance the company would report as ending work-in-process inventory. E. Prepare the journal entry (ies) needed to record Bartlett's sales, which are all made on account.

Which of the following entities would not likely be a user of job-costing systems?

Caldon Products started and finished job no. C19 during June. The job required $15,000 of direct material and 75 hours of direct labor at $12 per hour. The predetermined overhead rate is $16 per direct labor hour. During June, direct materials requisitions for all jobs totaled $149,000; the total direct labor hours and cost were 6,200 hours at $12 per hour; and the total cost of jobs completed was $337,500. All of these figures include data that pertain to job no. C19. Required: A. Prepare journal entries that summarize June's total activity. B. Determine the cost of job no. C19.

Pincus Corporation, which uses a job-costing system, had two jobs in process at the start of 20x1: job no. 59 ($95,000) and job no. 60 ($39,500). The following information is available: · The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $720,000 and 20,000 hours, respectively. · The company worked on three jobs during the first quarter. Direct materials used, direct labor incurred, and machine hours consumed were: · Manufacturing overhead during the first quarter included charges for depreciation ($20,000), indirect labor ($50,000), indirect materials used ($4,000), and other factory costs ($108,700). · Pincus completed job no. 59 and job no. 60. Job no. 59 was sold for cash, producing a gross profit of $24,600 for the firm. Required: A. Determine the company's predetermined overhead application rate. B. Prepare journal entries as of March 31 to record the following. (Note: Use summary entries where appropriate by combining individual job data.) 1. The issuance of direct material to production, and the direct labor incurred. 2. The manufacturing overhead incurred during the quarter. 3. The application of manufacturing overhead to production. 4. The completion of job no. 59 and no. 60. 5. The sale of job no. 59.

Norwood Corporation uses a predetermined overhead rate of $20 per machine hour. In deriving this figure, the company's accountant used:

Use the following labor budget data for Roy & Miller Accounting, LLP to answer the following Questions The budgeted overhead cost for the year is $1,260,000. The company has estimated that one-third of the budgeted over¬head cost is incurred to support the firm’s two partners, and two-thirds goes to support the staff accountants. The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material, -If overhead is applied on the Monoco engagement based on two separate cost drivers, what is the cost of the engagement?

Which of the following types of companies would most likely use process costing?

The final step in recognizing the completion of production requires a company to debit Finished-Goods Inventory and credit Work-in-Process Inventory.

Manufacturing overhead:

Electricity costs that were incurred by a company's production processes should be debited to:

Product or service cost is a very objective number that anyone could agree on.

Metalica Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:

Which of the following statements regarding work in process is not correct?

Troski Corporation sells a number of products to groups that provide educational workshops and seminars. One of the products involves a combination leather case and note pad. The company purchases the case and pad combination from a supplier and encloses a $3 pen that contains the educational groups' name and logo. Troski began to carry this product at the start of 20x3, acquiring 12,500 cases from Executive Supply for $87,500 along with an identical number of pens from Accent Goods. During 20x3, 9,500 of the cases and pens were issued to Troski's assembly operation where the pen is added. Eighty percent of these cases were completed as of December 31, and a review of the December 31 finished-goods inventory found 2,600 completed cases in the warehouse. Conversations with salespeople revealed that 70 finished sets were used in various company marketing activities throughout the year. Required: A. Determine the cost of the cases and pens that would appear in Troski's raw materials, work in process, and finished-goods inventory as of December 31. B. Determine the cost of the cases and pens that would appear in the company's cost of goods sold for 20x3.

Flores Company, which uses labor hours to apply overhead to manufacturing, may have increased amounts of underapplied overhead at month-end if: