Exam 2: Job-Order Costing: Calculating Unit Production Costs

The direct labor rate for Brent Corporation is $9.00 per hour,and manufacturing overhead is applied to products using a predetermined overhead rate of $6.00 per direct labor-hour.During May,the company purchased $60,000 in raw materials (all direct materials)and worked 3,200 direct labor-hours.The Raw Materials inventory (all direct materials)decreased by $3,000 between the beginning and end of May.The Work in Process inventory on May 1 consisted of one job which had been charged with $4,000 in direct materials and on which 300 hours of direct labor time had been worked.There was no Work in Process inventory on May 31. The balance in the Work in Process inventory account on May 1 was:

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:

Departmental overhead rates are generally preferred to plant-wide overhead rates when:

During December,Mccroskey Corporation incurred $66,000 of actual Manufacturing Overhead costs.During the same period,the Manufacturing Overhead applied to Work in Process was $69,000. Required: Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.

Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours.Last year manufacturing overhead and direct labor-hours were estimated at $50,000 and 20,000 hours,respectively,for the year.In June,Job #461 was completed.Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour.At the end of the year,it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. Required: a.Job #461 contained 100 units.Determine the unit product cost that would appear on the job cost sheet. b.Determine the underapplied or overapplied overhead for the year.

Meyers Corporation had the following inventory balances at the beginning and end of November: During November,$39,000 in raw materials (all direct materials)were drawn from inventory and used in production.The company's predetermined overhead rate was $8 per direct labor-hour,and it paid its direct labor workers $10 per hour.A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account.The ending Work in Process inventory account contained $4,700 of direct materials cost.The Corporation incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. The direct materials cost in the November 1 Work in Process inventory account totaled:

The following partially completed T-accounts summarize transactions for Farwest Corporation during the year: The manufacturing overhead was:

During December,Deller Corporation purchased $79,000 of raw materials on credit to add to its raw materials inventory.A total of $68,000 of raw materials was requisitioned from the storeroom for use in production.These requisitioned raw materials included $4,000 of indirect materials. Required: Prepare journal entries to record the purchase of materials and their use in production.

Which of the following entries or sets of entries would record sales for the month of July of $200,000 for goods costing $119,000 for?

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:

Paulson Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.The Corporation has provided the following estimated costs for next year: Paulson estimated that 40,000 direct labor-hours and 20,000 machine-hours would be worked during the year.The predetermined overhead rate per machine-hour will be:

Aksamit Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the most recently completed year appear below: The predetermined overhead rate for the recently completed year was closest to:

Schoff Corporation has provided the following data for the most recent month: Required: Prepare T-accounts for Raw Materials,Work in Process,Finished Goods,Manufacturing Overhead,and Cost of Goods Sold.Record the beginning balances and each of the transactions listed above.Finally,determine the ending balances.

Allenton Company is a manufacturing firm that uses job-order costing.At the beginning of the year,the company's inventory balances were as follows: 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 31,000 machine-hours and incur $248,000 in manufacturing overhead cost.The following transactions were recorded for the year: a.Raw materials were purchased,$411,000. b.Raw materials were requisitioned for use in production,$409,000 ($388,000 direct and $21,000 indirect). c.The following employee costs were incurred: direct labor,$145,000;indirect labor,$61,000;and administrative salaries,$190,000. d.Selling costs,$148,000. e.Factory utility costs,$12,000. f.Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling,general,and administrative activities. g.Manufacturing overhead was applied to jobs.The actual level of activity for the year was 29,000 machine-hours. h.The cost of goods manufactured for the year was $783,000. i.Sales for the year totaled $1,107,000 and the costs on the job cost sheets of the goods that were sold totaled $768,000. j.The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold. Required: Prepare the appropriate journal entry for each of the items above (a.through j. ).You can assume that all transactions with employees,customers,and suppliers were conducted in cash.

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:

Quark Spy Equipment manufactures espionage equipment.Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours.For the current year,Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost.The following summarized information relates to January of the current year.The raw materials purchased include both direct and indirect materials. Required: Prepare journal entries to record Quark's transactions for the month of January.Do not close out the manufacturing overhead account.

Caber Corporation applies manufacturing overhead on the basis of machine-hours.At the beginning of the most recent year,the company based its predetermined overhead rate on total estimated overhead of $60,600.Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900.The company's predetermined overhead rate for the year was $10.10 per machine-hour. The overhead for the year 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?

If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied,then manufacturing overhead would be considered to be underapplied.

On August 1,Shead Corporation had $35,000 of raw materials on hand.During the month,the company purchased an additional $56,000 of raw materials.During August,$69,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $6,000.Prepare journal entries to record these events.Use those journal entries to answer the following questions: The credits to the Work in Process account as a consequence of the raw materials transactions in August total: