88. Which of the following would probably be the least appropriate allocation base for
allocating overhead in a highly automated manufacturer of specialty valves?
89. At the beginning of the year, manufacturing overhead for the year was estimated to be
$267,500. At the end of the year, actual direct labor-hours for the year were 22,100 hours, the
actual manufacturing overhead for the year was $262,500, and manufacturing overhead for the
year was overapplied by $13,750. If the predetermined overhead rate is based on direct labor–
hours, then the estimated direct labor-hours at the beginning of the year used in the
predetermined overhead rate must have been:
90. The Work in Process inventory account of a manufacturing firm shows a balance of $3,000
at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of
$500 and $300 for materials, and charges of $400 and $600 for direct labor. From this information,
it appears that the company is using a predetermined overhead rate, as a percentage of direct
labor costs, of:
91. Washtenaw Corporation uses a job-order costing system. The following data are for last
year:
Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What
predetermined overhead rate was used last year?
92. Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours
for the upcoming year. At the beginning of the most recently completed year, the company
estimated the labor-hours for the upcoming year at 52,000 labor-hours. The estimated variable
manufacturing overhead was $2.78 per labor-hour and the estimated total fixed manufacturing
overhead was $1,192,360. The actual labor-hours for the year turned out to be 52,600 labor-hours.
The predetermined overhead rate for the recently completed year was closest to:
93. Compton Company uses a predetermined overhead rate in applying overhead to
production orders on a labor cost basis in Department A and on a machine-hours basis in
Department B. At the beginning of the most recently completed year, the company made the
following estimates:
What predetermined overhead rate would be used in Department A and Department B,
respectively?
94. Hayne 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:
95. Mansfield Corporation estimates its manufacturing overhead costs to be $160,000 and its
direct labor costs to be $320,000 for 2012. The actual manufacturing labor costs were $80,000 for
job 1, $120,000 for job 2 and $160,000 for job 3 during 2012. Manufacturing overhead is applied to
jobs on the basis of direct labor costs using a predetermined overhead rate. The actual
manufacturing overhead cost for the year was $172,000.
The amount of overhead assigned to Job 3 during 2012 was:
96. The predetermined overhead rate for manufacturing overhead for Mansfield Corporation
was $8.00 per direct labor hour. The estimated labor rate was $10.00 per hour. If the estimated
direct labor cost was $150,000, what was the estimated manufacturing overhead?
97. The Collins Company uses predetermined overhead rates to apply manufacturing
overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and
machine-hours in Dept. B. At the beginning of the year, the company made the following
estimates:
What predetermined overhead rates would be used in Dept A and Dept B, respectively?
98. Simoneaux Corporation bases its predetermined overhead rate on the estimated machine–
hours for the upcoming year. At the beginning of the most recently completed year, the company
estimated the machine-hours for the upcoming year at 22,000 machine-hours. The estimated
variable manufacturing overhead was $8.65 per machine-hour and the estimated total fixed
manufacturing overhead was $609,400. The predetermined overhead rate for the recently
completed year was closest to:
99. Kelsh Company uses a predetermined overhead rate based on machine–hours to apply
manufacturing overhead to jobs. The company has provided the following estimated costs for next
year:
Kelsh estimates that 5,000 direct labor-hours and 10,000 machine-hours will be worked during the
year. The predetermined overhead rate per hour will be:
100. Kaiser Corporation bases its predetermined overhead rate on the estimated machine–
hours for the upcoming year. Data for the upcoming year appear below:
The predetermined overhead rate for the recently completed year was closest to:
101. The following data have been recorded for recently completed Job 674 on its job cost
sheet. Direct materials cost was $2,039. A total of 32 direct labor-hours and 175 machine-hours
were worked on the job. The direct labor wage rate is $14 per labor-hour. The company applies
manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $15
per machine-hour. The total cost for the job on its job cost sheet would be:
102. Job 731 was recently completed. The following data have been recorded on its job cost
sheet:
The company 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 731 would be:
103. Under Lamprey Company’s job-order costing system, manufacturing overhead is applied
to Work in Process inventory using a predetermined overhead rate. During January, Lamprey’s
transactions included the following:
Lamprey Company had no beginning or ending inventories. What was the cost of goods
manufactured for January? (CMA adapted)
104. Delhoyo Corporation, a manufacturing company, has provided data concerning its
operations for September. The beginning balance in the raw materials account was $37,000 and
the ending balance was $29,000. Raw materials purchases during the month totaled $57,000.
Manufacturing overhead cost incurred during the month was $102,000, of which $2,000 consisted
of raw materials classified as indirect materials. The direct materials cost for September was:
105. Gest Inc. has provided the following data for the month of November. The balance in the
Finished Goods inventory account at the beginning of the month was $49,000 and at the end of
the month was $45,000. The cost of goods manufactured for the month was $226,000. The actual
manufacturing overhead cost incurred was $74,000 and the manufacturing overhead cost applied
to Work in Process was $70,000. The adjusted cost of goods sold that would appear on the
income statement for November is:
106. Assume that the following events occurred at a division of Admiral Enterprises for the
current year.
(1) Purchased $900,000 in direct materials.
(2) Incurred direct labor costs of $520,000.
(3) Determined that manufacturing overhead was $820,000.
(4) Transferred 75% of the materials purchased to Work–in-Process Inventory.
(5) Completed work on 60% of the work in process. Costs assigned equally across all work-in–
process.
(6) The inventory accounts have no beginning balances. All costs incurred were debited to the
appropriate account and credited to Accounts Payable.
Required: Compute the following amounts in the Work-in-Process Inventory account:
(a) Transfers-in (TI).
(b) Transfers-out (TO).
(c) Ending balance (EB).
107. Assume that the following events occurred at a division of General Enterprises for the
current year.
(1) Purchased $450,000 in direct materials.
(2) Incurred direct labor costs of $260,000.
(3) Determined that manufacturing overhead was $410,000.
(4) Transferred 70% of the materials purchased to Work-in-Process Inventory.
(5) Completed work on 65% of the work in process. Costs assigned equally across all work–in–
process.
(6) The inventory accounts have no beginning balances.
Required: Compute the following amounts in the Work-in-Process Inventory account:
(a) Transfers-in (TI).
(b) Transfers-out (TO).
(c) Ending balance (EB).
108. Smith and Blarney Refiners began business on July 1. The following operations data are
available for July and the one product the company produces:
All production at Smith and Blarney is sold as it is produced (i.e., there are no finished goods
inventories).
Required:
(a) Compute cost of goods sold for July.
(b) What is the value of the work–in-process inventory on July 31?