118. The following budget data are available for Oldest Company:
Estimated direct labor hours
12,000
Estimated direct labor dollars
$90,000
Estimated factory overhead costs
$198,000
If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is
119. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the
year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual
factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount
of overapplied or underapplied manufacturing overhead at the end of the year?
120. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the
year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual
manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the
predetermined overhead rate per direct labor hour?
121. A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the
year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual
manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. The entry to
apply the factory overhead costs for the year would include a
122. Bar code scanners are now being used to track incoming materials and to electronically transmit this data.
Scanners have replaced which of the following:
123. A separate account for each material is found in a
124. The materials requisition is used to
125. Period costs are
126. Generally, period costs are classified as either
127. The following are true regarding product costs except
128. Job cost sheets can provide information to managers for all but the following:
129. A difference in quantity of materials used on two comparable jobs may be caused by:
130. Which of the following would probably not be found in the accounting system of a service provider?
131. Which of the following entries would probably not be found on the books of a service provider?
132. In a job order cost accounting system used by a service business, which of the following items would
normally not be included as part of overhead?
133. The direct labor and overhead costs of providing services to clients are accumulated in:
134. When a job is completed in a service organization, the job costs are transferred to the
135. The following budget data are available for Happy Company:
Estimated direct labor hours
12,000
Estimated direct labor dollars
$90,000
Estimated factory overhead costs
$179,000
Actual direct labor hours
11,500
Actual direct labor dollars
$92,000
Actual factory overhead costs
$180,000
If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is
136. The following budget data are available for Happy Company:
Estimated direct labor hours
12,000
Estimated direct labor dollars
$90,000
Estimated factory overhead costs
$180,000
Actual direct labor hours
11,500
Actual direct labor dollars
$92,000
Actual factory overhead costs
$181,000
If factory overhead is to be applied based on direct labor hours as the cost allocation base for the predetermined overhead rate, the amount of
overhead applied into production is
137. Scooby Company has applied $567,988 of overhead into production on Jobs in the Work in Process
account. Actual overhead at the end of the year is $575,000. What is the adjustment for over or underapplied
overhead?
138. Zeke Company is a manufacturing company that has worked on several production jobs during the 1st
quarter of the year. Below is a list of all the jobs for the quarter:
Job 356
Job 357
Job 358
Job 359
Job 360
Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is the ending balance of Work in Process for Zeke Company as of the end of the 1st quarter?
139. Zeke Company is a manufacturing company that has worked on several production jobs during the 1st
quarter of the year. Below is a list of all the jobs for the quarter:
Job 356
Job 357
Job 358
Job 359
Job 360
Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is the ending balance of Finished Goods for Zeke Company as of the end of the 1st quarter?
140. Zeke Company is a manufacturing company that has worked on several production jobs during the 1st
quarter of the year. Below is a list of all the jobs for the quarter:
Job 356
Job 357
Job 358
Job 359
Job 360
Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is the ending balance of Cost of Goods sold for Zeke Company as of the end of the 1st quarter?
141. Zeke Company is a manufacturing company that has worked on several production jobs during the 1st
quarter of the year. Below is a list of all the jobs for the quarter:
Job 356
Job 357
Job 358
Job 359
Job 360
Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is Sales for Zeke Company as of the end of the 1st quarter?
142. Zeke Company is a manufacturing company that has worked on several production jobs during the 1st
quarter of the year. Below is a list of all the jobs for the quarter:
Job 356
Job 357
Job 358
Job 359
Job 360
Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is Gross Margin for Zeke Company as of the end of the 1st quarter?
143. The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. If the actual factory
overhead totaled $141,800, determine the over or under applied amount for the month.
144. The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year
was $1,375,000. Determine the over or under applied amount for the year.
145. Record in good journal entry format the following transactions:
1.
April 10, 400 units of raw materials were purchased at $5.50.
2.
April 15, 300 units of raw materials were requisitioned at $6.00 for production, Job 345.
3.
April 25, 200 units of raw materials were requisitioned at $5.50 for production, Job 555.
April 10
Materials
2,200
Accounts payable
2,200
April 15
Work in process
1,800
April 25
Work in process
1,100
Materials
1,100
146. The Cavy Company accumulated 560 hours of direct labor on Job 345 and 800 hours on Job 777. The
direct labor was incurred at a rate of $20 per direct labor hour for Job 345 and $21 per direct labor for Job 777.
Journalize the entry to record the flow of labor costs into production.
Work in process
28,000
Wages payable
28,000
147. During the month of April, Cavy Company incurred factory overhead as follows:
Indirect materials
$11,000
Factory Supervision Labor
$4,000
Utilities
$500
Depreciation (factory)
$700
Small tools
$300
Equipment rental
$750
148. Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours
are estimated to be 100,000. Determine (a) the predetermined factory overhead rate, (b) the amount of factory
overhead applied to Job 345 if the amount of direct labor hours is 560 and Job 777 if the amount of direct labor
hours is 800, and (c) prepare the journal entry to apply factory overhead in April according to the predetermined
overhead rate.
Work in process
8,976
Factory overhead
8,976
149. The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.
Factory overhead
17,250
Materials
11,000
Wages payable
4,000
Utilities
Accumulated depreciation
Small tools
Equipment rental
150. The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. What is the amount
that will be applied to all of the jobs for the month of April?
151. The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. Prepare the journal
entry to apply factory overhead.
Work in Process
175,665
Factory Overhead
175,665
152. At the end of April, Cavy Company had completed Job 766 and 765. According to the individual job cost
sheets the information is as follows:
Job
Direct Materials
Direct Labor
Machine Hours
Job 765
$5,670
$3,500
27
Job 766
$8,900
$4,775
44
Job 765 produced 152 units, and Job 766 consisted of 250 units.
Assuming that the predetermined overhead rate is applied by using machine hours at a rate of $200 per hour, determine the (a) balance on the job cost
sheets for each job, and (b) the cost per unit at the end of April.
153. Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished
goods inventory was 5,000 units at $405,000. Determine the cost of goods sold for 20,000 units, assuming a
FIFO cost flow.
154. The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. If the actual factory
overhead totaled $141,800, determine the over or under applied amount for the month.
155. The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year
was $1,375,000.
156. The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The
company has decided that the basis for applying factory overhead should be machine hours, which is estimated
to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year
was $1,348,800.
157. Cranston Company estimates the following overhead costs for the coming year:
Equipment depreciation
$160,000
Equipment maintenance
60,000
Supervisory salaries
40,000
Factory rent
100,000
Total
$360,000
Cranston is also budgeting $600,000 in direct labor costs and 15,000 machine hours for the coming year.
Required:
a. Calculate the predetermined overhead rate using direct labor costs as the allocation base.
b. Calculate the predetermined overhead rate using machine hours as the allocation base.
Factory Overhead
8,700
Cost of Goods Sold
8,700
158. Flagler Company allocates overhead based on machine hours. They estimated overhead costs for the year
to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000
machine hours and $380,000 of overhead.
Required:
a. Calculate the overhead application rate for the year.
b. What is the amount of applied overhead for the year?
c. What is the amount of under or overapplied overhead for the year? Indicate whether it is over– or
underapplied.
159. The Tulsa Company allocates overhead based on a predetermined overhead rate of $9.00 per direct labor
hour. Job S35 required 8 tons of direct material at a cost of $600.00 per ton and took employees who earn
$21.00 per hour a total of 80 hours to complete. What is the total cost of Job S35?
Direct materials
8 tons @ $600
$ 4,800
Direct labor
80 hours @ $21
1,680
Manufacturing overhead
80 hours @ $9
720
Total cost of S35
$7,200
160. Technics Inc., a manufacturing company, utilizes job order costing. Each division establishes its own
estimates regarding overhead which are as follows:
Division A
Division B
Total estimated overhead
$128,000
$261,000
Total estimated machine hours
16,000
72,500
Total estimated direct labor costs
$155,000
$290,000
Required:
If Division A allocates overhead on the basis of machine hours, and Division B allocates overhead as a percentage of direct labor costs, what would
the predetermined overhead rate be for each division?
161. Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred
$780,000 of overhead and estimated overhead was $735,000.
What is Crain’s predetermined overhead rate? Was overhead overapplied or underapplied for the year? By
how much?
162. Define and discuss the two main types of cost accounting systems for manufacturing operations. What are
their similarities and differences?
163. Discuss how job order cost information is used in decision making. What are some possible reasons that
actual cost of materials would exceed expected costs for a job?