Accounting Chapter 7 4 Scotts o Corporation Applies Overhead Using Actual

84. Scottso Corporation applies overhead using an actual costing approach. Budgeted factory

overhead was $266,400, budgeted machine-hours were 18,500. Actual factory overhead was

$287,920, actual machine-hours were 19,050. How much is the Over- or underapplied overhead?

85. Scottso Corporation applies overhead using a normal costing approach based upon

machine-hours. Budgeted factory overhead was $232,750, budgeted machine-hours were 17,500.

Actual factory overhead was $227,830, actual machine-hours were 16,150. How much overhead

would be applied to production?

86. Scottso Corporation applies overhead using a normal costing approach based upon

machine-hours. Budgeted factory overhead was $232,750, budgeted machine-hours were 17,500.

Actual factory overhead was $227,830, actual machine-hours were 16,150. How much is the Over-

or underapplied overhead?

87. In computing its predetermined overhead rate, Marple Company inadvertently left its

indirect labor costs out of the computation. This oversight will cause:

88. Which of the following is the correct formula to compute the predetermined overhead

rate?

89. What document is used to determine the actual amount of direct labor to record on a job

cost sheet?

90. In a job-order costing system, direct labor cost is ordinarily debited to:

91. Which of the following accounts is debited when direct labor is recorded?

92. The balance in the Work-in-Process account equals:

93. Martinez Aerospace Company uses a job-order costing system. The direct materials for

Job #045391 were purchased in July and put into production in August. The job was not completed

by the end of August. At the end of August, in what account would the direct material cost

assigned to Job #045391 be located?

94. Which terms will make the following statement true? When manufacturing overhead is

overapplied, the Manufacturing Overhead account has a __________ balance and applied

manufacturing overhead is greater than __________ manufacturing overhead.

95. Which of the following is correct with respect to closing out overapplied manufacturing

overhead to Cost of Goods Sold versus closing it out to Cost of Goods Sold and Finished Goods

and Work-in-Process inventories?

96. Daguio Corporation uses direct labor-hours in its predetermined overhead rate. At the

beginning of the year, the total estimated manufacturing overhead was $224,580. At the end of

the year, actual direct labor-hours for the year were 18,200 hours, manufacturing overhead for the

year was underapplied by $12,100, and the actual manufacturing overhead was $219,580. The

predetermined overhead rate for the year must have been closest to:

97. Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply

manufacturing overhead to jobs. Last year, the company’s estimated manufacturing overhead was

$1,200,000 and its estimated level of activity was 50,000 direct labor-hours. The company’s direct

labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $1,240,000, with

actual direct labor cost of $650,000. For the year, manufacturing overhead was:

98. Crinks Corporation uses direct labor-hours in its predetermined overhead rate. At the

beginning of the year, the estimated direct labor-hours were 11,200 hours and the total estimated

manufacturing overhead was $259,840. At the end of the year, actual direct labor-hours for the

year were 10,800 hours and the actual manufacturing overhead for the year was $254,840.

Overhead at the end of the year was:

99. 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:

100. Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the

beginning of the year, the estimated direct labor-hours were 21,600 hours. At the end of the year,

actual direct labor-hours for the year were 20,400 hours, the actual manufacturing overhead for

the year was $506,920, and manufacturing overhead for the year was underapplied by $23,440.

The estimated manufacturing overhead at the beginning of the year used in the predetermined

overhead rate must have been:

101. Malcolm Company uses a predetermined overhead rate based on direct labor–hours to

apply manufacturing overhead to jobs.

102. 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:

103. Lietz Corporation has provided the following data concerning manufacturing overhead for

January:

The company’s Cost of Goods Sold was $369,000 prior to closing out its Manufacturing Overhead

account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold.

Which of the following statements is true?

104. Caryl 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 underapplied by $10,000.

The company allocates any underapplied or overapplied overhead among Work–in-Process,

finished goods, and cost of goods sold at the end of the month on the basis of the overhead

applied during the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied overhead for March

would include the following:

105. Sharp Company’s records show that overhead was overapplied by $10,000 last year. This

overapplied overhead was closed out to the Cost of Goods Sold account at the end of the year. In

trying to determine why overhead was overapplied by such a large amount, the company has

discovered that $6,000 of depreciation on factory equipment was charged to administrative

expense in error. Given the above information, which of the following statements is true?

106. The actual manufacturing overhead incurred at Hogans Corporation during April was

$59,000, while the manufacturing overhead applied to Work-in-Process was $74,000. The

company’s Cost of Goods Sold was $289,000 prior to closing out its Manufacturing Overhead

account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold.

Which of the following statements is true?

107. 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:

108. 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: