devry acct244 week 6 and week 7 homework es

| June 1, 2016

Question
n(TCO 2) Mark Corporation estimates its manufacturing overhead to be $110,000 and its direct labor costs to be $220,000 for Year 1. The actual direct labor costs for the year include:

Job 301 $60,000

Job 302 82,000

Job 303 98,000

The actual manufacturing overhead was $121,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs by using predetermined rates. What was the over- or underapplied manufacturing overhead for Year 1?

$11,000 overapplied

$11,000 underapplied

$1,000 overapplied

$1,000 underapplied

Question 2. Question : (TCO 2) The journal entry to record the actual manufacturing overhead costs for indirect material is:

a

b

c

d

e

Question 3. Question : (TCO 2) Cedar Company estimates its manufacturing overhead to be $700,000 and its direct labor costs to be $560,000 for Year 2. Cedar worked on the following three jobs for the year:

Job Status Direct Labor Costs

Job 2-1 Completed and sold $195,000

Job 2-2 Completed by not sold 325,000

Job 2-3 In progress 130,000

Actual manufacturing overhead for Year 2 was $822,000. Manufacturing overhead is applied on the basis of direct labor costs. How much of the underapplied overhead should be allocated to finished goods?

$2,850

$1,900

$4,750

$9,500

Comments:

Question 4. Question : (TCO 2) In order to compute equivalent units of production using the FIFO method of process costing, work for the period must be broken down to units:

completed during the period and units in ending inventory.

started during the period and units transferred out during the period.

completed from beginning inventory, started and completed during the month, and units in ending inventory.

processed during the period and units completed during the period.

Question 5. Question : (TCO 2) The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory, which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units, which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing. What are the equivalent units of production for the conversion costs during the period?

14,500

15,100

16,500

17,100

(TCO 2) Activity analysis is one of the first stages in implementing an activity-based costing system. Which of the following steps of activity analysis is usually performed first?

Classify all activities as value added or nonvalue added.

Record, from start to finish, the activities used to complete the product or service.

Identify the process objectives that are defined by what the customer wants from the process.

Improve the efficiency of all activities and develop plans to eliminate any nonvalue-added activities.

Question 2. Question : (TCO 2) Zela Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information provided below.

Budgeted material handling costs: $50,000

Under an activity-based costing (ABC) system, the materials handling costs allocated to one unit of wall mirrors would be:

$625.00.

$312.50.

$833.33.

$1,000.00.

Question 3. Question : (TCO 2) A company has identified the following overhead costs and cost drivers for the coming year:

Budgeted direct labor cost was $100,000, and budgeted direct material cost was $280,000. The following information was collected on three jobs that were completed during the year:

If the company uses activity-based costing (ABC), how much overhead cost should be assigned to Job 101?

$1,300

$2,000

$5,000

$5,600

Comments:

Question 4. Question : (TCO 2) Scottso Enterprises has identified the following overhead costs and cost drivers for the coming year:

Budgeted direct labor cost was $200,000, and budgeted direct material cost was $800,000. The following information was collected on three jobs that were completed during the month:

If the company uses activity-based costing (ABC), what is the cost of each unit of Job A-28?

$320.00

$30.40

$187.40

$350.40

Question 5. Question : (TCO 2) Which of the following statements is true?

One of the lessons learned from activity-based costing (ABC) is that all costs are really a function of volume.

The primary purpose of the plant wide and department allocation methods is allocating direct costs to specific products.

A problem with activity-based costing (ABC) is that it requires more recordkeeping than other methods.

Direct cost allocations are required for the plant wide and department allocation methods.

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