Question

21. Hen Hao Lao Shi Mullen, Inc developed the following data:

Beginning work in process inventory (WIP)
Direct materials used (DM)
Actual overhead (OH)

Overhead applied (est OH)
Cost of goods manufactured (CGM)
Ending work in process (WIP)
Hen Hao Lao Shi Mullen, Inc's total manufacturing costs (TMC) for the period is

1. A) $570,000.

2. B) $540,000.

3. C) $390,000.

4. D) cannot be determined from the data provided.

Page 5

$270,000

210,000 330,000 240,000 360,000 450,000

22. Hen Hao Professor Mullen, Inc applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:
Estimated $$ annual overhead cost

$1,200,000 $1,155,000 400,000 380,000

Actual $$ annual overhead cost Estimated machine hours Actual machine hours

1. A) $1,140,000 applied and $15,000 overapplied

2. B) $1,200,000 applied and $15,000 overapplied

3. C) $1,140,000 applied and $15,000 underapplied

4. D) $1,145,000 applied and neither under- nor overapplied

23. If the Manufacturing Overhead (OH) account has a net Debit (DR) balance at the end of a period, it means that

    1. A) actual overhead costs were less than overhead costs applied to jobs. (Over Applied OH)

    2. B) actual overhead costs were greater than overhead costs applied to jobs. (Under Applied

       OH)

    3. C) actual overhead costs were equal to overhead costs applied to jobs. (Neither Over nor

       Under Applied)

    4. D) Absolute Genius Professor Mullen has been awarded the Nobel Prize in Managerial

       Accounting!

24. If Manufacturing Overhead (OH) has a net Credit (CR) balance at the end of the period, then

    1. A) Overhead has been Underapplied.

    2. B) the Overhead applied to Work in Process Inventory (WIP) is less than the actual

       Overhead incurred.

    3. C) Overhead has been Overapplied.

    4. D) management must take corrective action and fire Lao Shu Professor Mullen

25. The Manufacturing Overhead (OH) account shows Debits (DR) of $30,000, $24,000, and $28,000 and one Credit (CR) for $86,000. Based on this information, manufacturing overhead (OH)

    1. A) has been Overapplied.

    2. B) has been Underapplied.

    3. C) has not been Applied.

    4. D) shows a zero ($0) balance.

26. If Overhead (OH) has been Underapplied during the year, the Adjusting Journal Entry (AJE) to Close Out the OH Account at the end of the year will show a

    1. A) debit (DR) to Manufacturing Overhead (OH).

    2. B) credit (CR) to Cost of Goods Sold (CGS).

    3. C) debit (DR) to Work in Process (WIP) Inventory.

    4. D) debit (DR) to Cost of Goods Sold (CGS).

Answer 1