Question

1)A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.   True or False

2) Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $1,500 of direct materials and used $3,000 of direct labor. The job was not finished by the end of September, but needed an additional $2,000 of direct materials and additional direct labor of $4,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?Multiple Choice

• $10,500

• $6,500

• $3,500

• $7,500

• $4,500

3) The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.

Work in Process Inventory
Beginning WIP	5,500
Direct materials	48,100
Direct labor	30,600
Applied overhead	16,800
Total Mfg. costs	101,000
To finished goods			?
Ending WIP	10,900

The cost of jobs transferred to finished goods is:

Multiple Choice

• $101,000.

• $95,500.

• $99,200.

• $111,900.

• $90,100.

4) Requisitions of indirect materials are not recorded on job cost sheets. True or False

Answer 1

Solution 1:

True, "A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products."

Solution 2:

Balance of WIP at the end of september = $1,500 + $3,000 + $3,000*200% = $10,500

Hence first option is correct.

Solution 3:

Cost of job completed and transferred to finished goods = Total manufacturing costs - Ending WIP

= $101,000 - $10,900 = $90,100

Hence last option is correct.

Solution 4:

False, requisition of indirect material are recorded on job cost sheet as part of factory overhead.