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7-102
111.
112.
Mirror Lake Corporation recorded the following transactions for the just completed month:
113.
During April, Orbitz Corporation incurred $64,000 of actual Manufacturing Overhead costs.
During the same period, the Manufacturing Overhead applied to Work-in-Process was
$66,000.
Required:
Prepare journal entries to record the incurrence of manufacturing overhead and the
application of manufacturing overhead to Work-in-Process.
7-105
114.
The following cost data relate to the manufacturing activities of Falco Industries during
the just completed year:
Total actual manufacturing overhead
costs incurred (including $15,000 of
indirect materials)
$353,000
Purchases of raw materials (both
direct and indirect)
$250,000
Direct labor cost
$135,000
Inventories:
Raw materials, beginning
$10,000
Raw materials, ending
$15,000
Work-in-Process, beginning
$20,000
Work-in-Process, ending
$35,000
The company uses a predetermined overhead rate to apply manufacturing overhead cost
to production. The predetermined overhead rate for the year was $15 per machine-hour. A
total of 23,000 machine-hours were recorded for the year.
Required:
a. Compute the amount of underapplied or overapplied overhead cost for the year.
b. Prepare a Schedule of Cost of Goods Manufactured for the year.
7-107
115.
The following selected data were taken from the books of the Fisher Foil Company. The
company uses job costing to account for manufacturing costs. The data relate to June
operations.
A) Materials and supplies were requisitioned from the stores clerk as follows:
Job 405, material X, $7,000.
Job 406, material X, $3,000; material Y, $6,000.
Job 407, material X, $7,000; material Y, $3,200.
For general factory use: materials A, B, and C, $2,300.
B) Time tickets for the month were chargeable as follows:
Job 405
$11,000
300 hrs
Job 406
14,000
360 hrs
Job 407
8,000
190 hrs
Indirect labor
3,700
C) Other information:
Beginning work-in-process, June 1, $-0-
Factory paychecks for $36,700 were issued during the month.
Various factory overhead charges of $19,400 were incurred on account.
Depreciation of factory equipment for the month was $5,400.
Factory overhead was applied to jobs at the rate of $35.00 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $2,100.
Factory overhead is closed out only at the end of the year.
Required:
(a) Determine the ending work-in-process balance on June 30.
(b) Determine the cost of goods manufactured for June.
(c) Is factory overhead over- or underapplied for June? What is the monthly value?
7-109
116.
Prepare the necessary journal entries from the following information for Blalock Company.
a. Purchased materials on account, $56,700.
b. Requisitioned materials for production as follows: direct materials - 80 percent of
purchases, indirect materials - 15 percent of purchases.
c. Direct labor for production is $33,100, indirect labor is $12,500.
d. Overhead incurred (not including materials or overhead): $52,900.
e. Overhead is applied to production based on direct labor cost at the rate of 220 percent.
f. Goods costing $97,600 were completed during the period.
g. Goods costing $51,320 were sold on account for $77,600.
h. Close the overhead control account to Cost of Goods Sold.
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117.
On October 1, the general ledger of Morgan Industries had the following accounts and
balances:
Materials inventory
$19,200
Work-in-process inventory
48,750
Finished goods inventory
8,100
Manufacturing overhead (overapplied)
2,000
The subsidiary ledgers had the following information on October 1:
Job Cost Sheets
Finished
Goods Cards
Job
Number
Direct
Mat'ls.
Direct
Labor
Manufacturing
Overhead
Job
Number
Cost
B81
$?
$7,000
$8,750
B80
$5,200
B83
4,300
?
11,500
B82
?
?
?
$20,250
?
During October, the following costs were incurred on account:
Materials
$46,500
Factory labor
49,000
Manufacturing overhead
56,350
A summary of the materials requisition slips and the labor time tickets for the month
revealed the following distribution:
Applicable
To
Materials
Requisitions
Time
Tickets
Job B81
$8,000
$4,000
Job B83
5,100
1,700
Job B84
8,600
10,500
Job B85
19,900
16,750
7-112
Job B86
12,750
?
General Use
?
4,500
$58,250
?
Overhead is applied based upon direct labor cost. Jobs B81, B83, and B84 were for 8,000,
6,000 and 4,800 units of product, respectively, and were completed during October. Jobs
B80, B81, B82, and B83 were sold on account for $150,000.
Required:
Prepare T-accounts for a job order cost system, posting the beginning balances and all
transactions for the month. Clearly indicate the ending balances for the accounts and label
the 'cost of goods manufactured' and 'cost of goods sold' amounts.
7-113
118.
The Shotz Company had the following transactions and events during its first year of
operations. Estimated overhead for the year was $770,000; estimated direct labor cost for
the year was $350,000.
a. Purchased materials on account, $567,000.
b. Requisitioned materials for production as follows: direct materials - 85 percent of
7-114
purchases, indirect materials - 12 percent of purchases.
c. Direct labor for production is $331,000, indirect labor is $125,000.
d. Overhead incurred (not including materials or labor): $529,000.
e. Overhead is applied to production based on direct labor cost at the rate of ___ .
f. Goods costing $976,000 were completed during the period.
g. Goods costing $513,200 were sold on account for $776,000.
Required:
(1) Prepare the journal entries to record the transactions for the year.
(2) Prepare the journal entry to prorate the over- or underapplied overhead to the
appropriate accounts.
119.
During July, Morris Corporation purchased $76,000 of raw materials on credit to add to its
raw materials inventory. A total of $81,000 of raw materials was requisitioned from the
storeroom for use in production. These requisitioned raw materials included $5,000 of
indirect materials.
Required:
Prepare journal entries to record the purchase of materials and their use in production.
7-117
120.
The following selected data were taken from the records of the Fisher Foil Company. The
company uses a job costing system to account for its manufacturing costs. Fisher's fiscal
year runs from January 1 to December 31; manufacturing overhead is closed out only at
the end of the fiscal year. The following information relates to August operations.
(1.) Jobs in process on August 1.
Job No.
Materials
Labor
Overhead
W12
$800
$1,200
??
X13
1,000
1,620
??
(2.) Jobs completed during August: W12, X13, Y14.
(3.) Material requisitions and labor time tickets indicated the following:
Job No
Material
Requisition
Time
Tickets
W12
$610
$760
X13
370
1,420
Y14
2,780
3,100
Z15
4,050
1,080
General usc
390
540
(4.) Jobs sold during August: W12, X13.
(5.) Fisher applies overhead to production based upon labor costs.
(6.) Selected account balances on August 1 were:
Overhead
$1,400
overapplied
Materials
5,175
Work in process
9.,555
Finished goods
-0-
(7.) Various overhead incurred (excluding indirect materials and indirect labor) during
August, $13,500.
(8.) Materials (direct and indirect) purchased during August, $10,905.
7-118
7-120
121.
Augusta Test Systems manufactures automated test systems that perform quality
inspections during and at the completion of the manufacturing process. As most
manufacturing processes are unique, Augusta's test equipment is designed to customer
specifications, and each system has a selling price in excess of $300,000. The company
uses a job-order cost system based on the full absorption of actual costs and applies
overhead on the basis of machine hours using a predetermined overhead rate. For the
fiscal year ended November 30 budgeted manufacturing overhead was $1,960,000, and the
expected activity level was 98,000 machine hours. Data regarding several jobs at Augusta
are presented below.
By the end of November all jobs but RX-115 were completed, and all completed jobs had
been delivered to customers with the exception of SL-205.
Job No.
Balance
10/31
Direct
Materials
Direct
Labor
Machine
Hours
X J-107
$118,600
$4,000
$8,400
150
ST-211
121,450
2,500
12,160
300
XD-108
21,800
86,400
36,650
3,100
SL-205
34,350
71,800
32,175
2,700
RX-115
18,990
21,845
1,400
