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261
229) Kahanaoi Corporation is a manufacturer that uses job-order costing. The company closes out
any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The
company has supplied the following data for the just completed year:
Beginning inventories:
Raw materials
$38,000
Work in process
$16,000
Finished goods
$39,000
Estimated total manufacturing overhead at the
beginning of the year
$708,000
Estimated direct labor-hours at the beginning of the
year
48,000
direct labor-hours
Results of operations:
Raw materials purchased on account
$453,000
Raw materials (all direct) requisitioned for use in
production
$417,000
Direct labor cost
$545,000
Actual direct labor-hours
46,000
direct labor-hours
Manufacturing overhead:
Indirect labor cost
$151,000
Other manufacturing overhead costs incurred
$449,000
Selling and administrative:
Selling and administrative salaries
$193,000
Other selling and administrative expenses
$355,000
Cost of goods manufactured
$1,568,000
Sales revenue
$2,489,000
Cost of goods sold (unadjusted)
$1,498,000
Required:
a. What is the journal entry to record raw materials used in production?
b. What is the ending balance in Raw Materials?
c. What is the journal entry to record the direct and indirect labor costs incurred during the year?
d. What is the total amount of manufacturing overhead applied to production during the year?
e. What is the total manufacturing cost added to Work in Process during the year?
f. What is the journal entry to record the transfer of completed goods from Work in Process to
Finished Goods?
g. What is the ending balance in Work in Process?
h. Is manufacturing overhead overapplied or underapplied for the year? By how much?
i. What is the cost of goods available for sale during the year?
j. What is the journal entry to record the unadjusted cost of goods sold?
k. What is the adjusted cost of goods sold for the year?
l. What is the gross margin for the year?
m. What is the net operating income for the year?
264
230) Molin Corporation is a manufacturer that uses job-order costing. The company closes out any
overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company
has supplied the following data for the just completed year:
Estimated total manufacturing overhead at the
beginning of the year
$638,750
Estimated direct labor-hours at the beginning of the
year
35,000
direct labor-hours
Results of operations:
Actual direct labor-hours
40,000
direct labor-hours
Manufacturing overhead:
Indirect labor cost
$166,000
Other manufacturing overhead costs incurred
$595,000
Cost of goods sold (unadjusted)
$1,570,000
Required:
a. What is the total amount of manufacturing overhead applied to production during the year?
b. Is manufacturing overhead overapplied or underapplied for the year? By how much?
c. What is the adjusted cost of goods sold for the year?
231) Blasi Corporation is a manufacturer that uses job-order costing. The company closes out any
overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company
has supplied the following data for the just completed year:
Beginning inventories:
Finished goods
$33,000
Estimated total manufacturing overhead at the
beginning of the year
$540,000
Estimated direct labor-hours at the beginning of the
year
40,000
direct labor-hours
Results of operations:
Raw materials (all direct) requisitioned for use in
production
$462,000
Direct labor cost
$567,000
Actual direct labor-hours
39,000
direct labor-hours
Manufacturing overhead:
Indirect labor cost
$121,000
Other manufacturing overhead costs incurred
$451,000
Selling and administrative:
Selling and administrative salaries
$263,000
Other selling and administrative expenses
$299,000
Cost of goods manufactured
$1,371,000
Sales revenue
$3,298,000
Cost of goods sold (unadjusted)
$1,302,000
Required:
a. What is the total manufacturing cost added to Work in Process during the year?
b. What is the cost of goods available for sale during the year?
c. What is the net operating income for the year?
268
232) Gonzalez, Inc. manufactures stereo speakers in two factories; one in Vandalia, Illinois and
another in Modesto, California. The Vandalia factory uses direct labor cost (DL$) for its overhead
rate and the Modesto factory uses machine-hours (MHs) for its overhead rate. Information related
to both plants for last year is presented below:
Vandalia factory
Modesto factory
Estimated total manufacturing
overhead cost
$1,000,000
$1,600,000
Estimated total amount of allocation
base
(a)______________
200,000 MHs
Predetermined overhead rate
$10 per DL$
(d)______________
Actual amount of allocation base
(b)______________
190,000 MHs
Actual manufacturing overhead
$1,092,500
$1,472,500
Applied manufacturing overhead
$1,010,000
(e)_______________
Under or (over)applied overhead
(c) ______________
(f)_______________
Required:
Fill in the lettered blanks above. SHOW YOUR CALCULATIONS.
233) Fossil Manufacturing uses a predetermined overhead rate of $17.80 per direct labor-hour.
This predetermined rate was based on 11,000 estimated direct-labor-hours and $195,800 of
estimated total manufacturing overhead. The company incurred actual manufacturing overhead
costs of $194,000 and 10,500 direct labor-hours.
Required:
a. Determine the amount of underapplied or overapplied manufacturing overhead for the period.
b. Assuming that the company closed manufacturing overhead to cost of goods sold, make the
journal entry to close manufacturing overhead.
c. What is the effect of this entry on the company's gross margin?
271
234) Dotsero Technology, Inc., has a job-order costing system. The company uses predetermined
overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined
overhead rate in Department A is based on machine-hours, and the rate in Department B is based
on direct materials cost. At the beginning of the most recent year, the company's management
made the following estimates for the year:
Department A
Department B
Machine-hours
70,000
19,000
Direct labor-hours
30,000
60,000
Direct materials
$195,000
$282,000
Direct labor
$260,000
$520,000
Manufacturing overhead
$420,000
$705,000
Job 243 entered into production an April 1 and was completed on May 12. The company's cost
records show the following information about the job:
Department A
Department B
Machine-hours
250
60
Direct labor-hours
70
120
Direct materials
$840
$1,100
Direct labor
$610
$880
At the end of the year, the records of Dotsero showed the following actual cost and operating data
for all jobs worked on during the year:
Department A
Department B
Machine-hours
61,000
20,000
Direct labor-hours
28,000
66,000
Direct materials
$156,000
$284,000
Manufacturing overhead
$385,000
$705,000
Required:
a. Compute the predetermined overhead rates for Department A and Department B.
b. Compute the total overhead cost applied to Job 243.
c. Compute the amount of underapplied or overapplied overhead in each department at the end of
the current year.
235) Janeway Corporation uses a job-order costing system and has provided the following
partially completed T-account summary for the past year.
Required:
What was the cost of raw materials requisitioned for use in production during the year?
236) Falkenstein Corporation uses a job-order costing system and has provided the following
partially completed T-account summary for the past year.
Required:
What was the cost of indirect materials requisitioned for use in production during the year?
275
237) Sefcovic Enterprises LLC recorded the following transactions for the just completed month.
The company had no beginning inventories.
(1) Raw materials purchased for cash, $110,000
(2) Direct materials requisitioned for use in production, $79,000
(3) Indirect materials requisitioned for use in production, $15,000
(4) Direct labor wages incurred and paid, $125,000
(5) Indirect labor wages incurred and paid, $22,000
(6) Additional manufacturing overhead costs incurred and paid, $134,000
(7) Manufacturing overhead costs applied to jobs, $125,000
(8) All of the jobs in process were completed.
(9) All of the completed jobs were shipped to customers.
(10) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods
Sold.
276
Required:
a. Post the above transactions to the following T-accounts:
b. Determine the adjusted cost of goods sold for the month.
278
238) Wears Corporation uses a job-order costing system and has provided the following partially
completed T-account summary for the past year.
The Cost of Goods Manufactured for the year was $537,000.
Required:
What was the Cost of Goods Sold for the year?
239) Overly Corporation uses a job-order costing system and has provided the following partially
completed T-account summary for the past year.
Required:
What was the cost of completed jobs transferred from Work in Process to Finished Goods during
the year?
