Chapter 003, Systems Design: Job-Order Costing

| October 3, 2018

Cahin
Corporation applies manufacturing overhead on the basis of machine-hours. At
the beginning of the most recent year, the company based its predetermined
overhead rate on total estimated overhead of $21,060. Actual manufacturing
overhead for the year amounted to $13,000 and actual machine-hours were 1,380.
The company’s predetermined overhead rate for the year was $16.20 per
machine-hour.

87. The predetermined overhead rate was based on how many estimated
machine-hours? A. 1,380
B. 802 C. 225 D. 1,300

88. The applied manufacturing overhead for the year was closest to:

A. $23,732

B. $21,060

C. $22,356

D. $13,800

89. The overhead for the year was:

A. $1,296 overapplied
B. $9,356 overapplied

C. $9,356 underapplied

D. $1,296 underapplied

3-35

Chapter 003, Systems Design: Job-Order Costing

Loraine Company applies manufacturing overhead to jobs using a
predetermined overhead rate of 70% of direct labor cost. Any underapplied or
overapplied overhead cost is closed to Cost of Goods Sold at the end of the
month. During August, the following transactions were recorded by the company:

.jpg”>

90. The amount of direct materials cost in the August 31 Work in
Process inventory account was:
A. $10,200 B. $9,000 C. $4,800 D. $4,200

91. The Cost of Goods Manufactured for August was:

A. $69,600

B. $69,500

C. $76,900

D. $84,500

3-36

Chapter 003, Systems Design: Job-Order Costing

92. The entry to dispose of the underapplied or overapplied overhead
cost for the month would include:
A. a
credit of $100 to Cost of Goods Sold.

B. a credit of $6,000 to Manufacturing Overhead. C. a debit of
$6,000 to Cost of Goods Sold.
D. a credit of $100
to the Manufacturing Overhead Account.

93. The balance on August 1 in the Raw Materials inventory account
was:

A. $4,500

B. $7,000

C. $9,000

D. $11,500

On
July 1, Woolard Corporation had $20,000 of raw materials on hand. During the
month, the company purchased an additional $53,000 of raw materials. During
July, $49,000 of raw materials were requisitioned from the storeroom for use in
production. These raw materials included both direct and indirect materials.
The indirect materials totaled $5,000.

Prepare journal entries to record these events. Use those journal
entries to answer the following questions:

94. The debits to the Raw Materials account for the month of July
total: A. $53,000
B. $20,000 C. $73,000 D.
$49,000

95. The credits to the Raw Materials account for the month of July
total: A. $53,000
B. $49,000 C. $20,000 D.
$73,000

3-37

Chapter 003, Systems Design: Job-Order Costing

96. The debits to the Work in Process account as a consequence of the
raw materials transactions in July total:
A. $53,000 B. $44,000 C. $0

D. $49,000

Get a 20 % discount on an order above $ 40
Use the following coupon code:
LOBSTER
Positive SSL