Exam 3: Product Costing and Cost Accumulation

Twin Oaks Limited recently used $5,000 of direct materials and $6,000 of indirect materials in production activities. The journal entries reflecting these transactions would include:

A review of the records of Okanagan Products disclosed the following year-end information: ▪ Work-in-Process Inventory account: Contained charges for overhead of $975,000. ▪ Cost-of-Goods-Sold account: Contained a year-end debit balance of $4,680,000. This amount was computed prior to any year-end adjustment for under- or overapplied overhead. ▪ Manufacturing Overhead account: Contained debits of $972,000, which included 30,000 of sales commissions. ▪ Okanagan applies manufacturing overhead to production by using a predetermined rate of $30 per machine hour. Budgeted overhead for the period was anticipated to be $1,000,000. Required: A. Determine the actual manufacturing overhead for the year. B. Determine the amount of manufacturing overhead applied to production. C. Is overhead under- or overapplied? By how much? D. Compute the adjusted cost-of-goods-sold figure that should be disclosed on the company's income statement. E. How many machine hours did Okanagan actually work during the year? F. Compute budgeted machine hours for the year.

An accountant recently debited Work-in-Process Inventory and credited Manufacturing Overhead. The accountant was:

The Bridlewood Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes out any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished-Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished-Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. What was the balance in the Finished-Goods inventory account at the beginning of the year?

Tiffany charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labour hours. The following data pertain to the current year: Budgeted manufacturing overhead: $1,800,000 Actual manufacturing overhead: $1,810,000 Budgeted labour hours: 60,000 Actual labour hours: 61,500 Which of the following choices denotes the correct status of manufacturing overhead at year-end?

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

Yole Corporation uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, Yole estimated manufacturing overhead would be $100,000 and direct labour hours would be 50,000. The actual figures for the year were $120,000 for manufacturing overhead and 52,000 direct labour hours. The cost records for the year will show which of the following?

In stage two of the two-stage allocation process, all of the manufacturing-overhead costs accumulated in each production department are assigned to:

Which of the following statements is true?

Blue Heron Manufacturing disposes of under or overapplied overhead at year-end as an adjustment to cost of goods sold. Prior to disposal, Blue Heron reported cost of goods sold of $700,000 in a year, when manufacturing overhead was underapplied by $25,000. If sales revenue totalled $2,000,000, the adjusted cost of goods sold and gross margin figures are:

As soon as products are completed, their costs are transferred from the Work-in-Process Inventory account to the:

The process of assigning manufacturing overhead costs to the jobs that are worked on is commonly called:

On November 28, 2008, Job No. C12 was completed at a cost of $20,500, subdivided as follows: direct material, $5,500; direct labour, $6,000; and manufacturing overhead, $9,000. The journal entry to record this information is: