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Exam 4: Product Costs and Job Order Costing

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Question 51

True/False

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After the entry is made to record the overhead applied,if the balance in the overhead account is a debit,more overhead was actually incurred than was recorded in the Work in Process account during the period.

A) True
B) False

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Question 52

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Oil to keep a factory machinery lubricated is an example of:

) undefined
) undefined

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Question 53

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The cost of goods manufactured is

Assume you have recently accepted a position as cost accountant for a large manufacturing company.The sales manager approaches you immediately about a particular product the company sells and expresses his belief that the product is overpriced and impossible to sell unless you do something to make it more marketable.You are not aware of any environmental or technology issues with the product that would inhibit its sales.Discuss four things you would do to investigate the concern expressed by the sales manager.Include more than just cost issues in your discussion.

The production costs of completed products are recorded in the finished goods inventory account.

Ignatenko Company estimates it will incur $2,400,000 in manufacturing overhead during the coming year.Additionally,it is estimated the company will operate at a level requiring 200,000 direct labor hours and 500,000 machine hours.At the end of the year Ignatenko had worked 203,000 direct labor hours,used 450,000 machine hours,and incurred 2,510,000 in manufacturing overhead. Required a.If Ignatenko Company used direct labor hours as its manufacturing overhead application base,how much overhead was applied to jobs during the year? b.Using direct labor hours as the application base,was manufacturing overhead under-or overapplied for the year? By how much? c.If Ignatenko Company used machine hours as its manufacturing overhead application base,how much overhead was applied to jobs during the year? d.Using machine hours as the application base,was manufacturing overhead under-or overapplied for the year? By how much?

Watson,Inc.applies overhead cost based on direct labor hours.In completing the 200

Which of the following is not a common application base for calculating the predetermined overhead rate?

The predetermined overhead rate is calculated by dividing budgeted total manufacturing overhead by budgeted activity level of application base.

If the amount of overapplied or underapplied manufacturing overhead is relatively large,most companies will generally make an adjustment to

Gough's Manufacturing had underapplied overhead totaling $5,000 during the period.To dispose of this underapplied overhead,Gough should

The work in process inventory account records the costs of all products that have been

Finished Goods represents products that are

Velton Corporation produces toddlers' plastic slides.In preparing the current budget,Velton's management chooses to use an overhead base of direct labor hours.Velton estimates a total of $300,000 in manufacturing overhead costs and 5,000 direct labor hours for the coming year.In December,Velton's controller reported actual manufacturing overhead incurred of $320,000 and 4,900 direct labor hours used during the year. Required: a.What is Velton's predetermined overhead rate for the year? b.How much manufacturing overhead did Velton apply during the year?

Which of the following is not classified as manufacturing overhead?

Direct materials are sometimes referred to as

Which of the following is not associated with period costs?

Work in Process Inventory increases when

Stone Cliff Company manufactures custom-order furniture.During 2016,actual manufacturing overhead totaled $720,000.Based on the 2016 results,and projected production for 2017,management prepared the 2017 budget and estimated that manufacturing overhead would total $800,000.The estimated number of direct labor hours for 2017 is 500,000,and the estimated amount of direct labor cost is $1,000,000.The company plans to use direct labor hours as the basis to allocate overhead to jobs.During May and June 2017,employees worked on the following four jobs: All jobs were started in May.Jobs X87 and A33 were completed and delivered to customers during June.What was the balance of the work in process inventory account on June 30?