Question

Page 10 of 12 Robinson & omson & Daughters uses a normal cost system to account for jobs it produces and closes out any over- or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Various accounts have beginning balances in the amounts as follows (in $1.000's). Cash Raw Materials Inventory (RM) 17 Work in Process Inventory (WIP) 22 Finished Goods Inventory (FG) Manufacturing Overhead (MOH) Property, Plant, and Equipment (PP&E) 315 Accounts Payable (A/P) 12 Retained Earnings (R/E) 516 41 A $ $ 62 75 20 20 16 8 A summary of transactions completed in the quarter are shown below in $1.000's: a. Raw materials purchased on account b. Raw materials used in production (80% were direct; the remainder indirect) c. Salaries & wages paid in cash (85% direct; 10% indirect: 5% selling & admin) d. Depreciation on PP&E (95% manufacturing: the remainder selling & admin) c. Factory utility expenses paid on account f Advertising expenses paid in cash g Manufacturing overhead applied to production h. Cost of goods manufactured i. Cash sales to customers j. Cost of goods sold (unadjusted) k. Over-applied overhead closed entirely to Cost of Goods Sold $ S $ $ 231 269 250 5 Hint: To answer the following two questions, use T-accounts. You can set them up on the following page. Show you steps. For the quarter ended on September 30, MOH applied to production (transaction g) was: A. $ : 57 B. $ 51 C. § 62 D. $ 67 E None of the above. 18 On September 30, the ending balance in Finished Goods Inventory was: A. $. 17 B. S 22 C. $ 60 D. $ 27 E None of the above:

Answer 1

17)

Answer: D $ 67

Workings:

Manu. OH
b)	$   15.00	g)	$   67.00
c)	$   12.00
d)	$   19.00
e)	$   16.00
k)	$      5.00
	$   67.00		$   67.00

18)

Answer: B $ 22

Workings:

Finished Goods
Beg. Bal.	$   41.00	j)	$ 250.00
h)	$ 231.00	End. Bal	$   22.00
	$ 272.00		$ 272.00