Question

11. Tatar Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials Work in process $ 37,000 $ 15,000 Results of operations: Raw materials purchased on account Raw materials (all direct) requisitioned for use in production $ 480,000 $ 434,000 How much is the ending balance in the Raw Materials inventory account? A) $37,000 B) $120,000 C) $83,000 D) S517,000 12. In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A) Predetermined overhead rate - Actual manufacturing overhead + Actual machine- hours Estimated machine B) Predetermined overhead rate - Actual manufacturing overhead hours C) Predetermined overhead rate Estimated manufacturing overhead Estimated machine-hours D) Predetermined overhead rate - Estimated manufacturing overhead + Actual machine hours 13. Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $92,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: A) debit to Manufacturing Overhead of $92,000 B) debit to Work in Process of $90,000 C) credit to Manufacturing Overhead of $92,000 D) credit to Work in Process of $90,000

Answer 1

11. Answer- (C). $ 83,000.

Explanation-

Calculation of ending Inventory of raw material

Beginning inventory + purchase inventory - Ending inventory = Inventory Consumed.

($37,000+$ 480,000) - Ending Inventory = $ 434,000.

$ 517,000 - Ending Inventory = $ 434,00)

$ 517,000 - $ 434,000 = Ending Inventory.

$ 83,000 = Ending Inventory

Hence, Ending Inventory of Raw Material = $ 83,000.

12. Answer- (C). Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours.

Explanation-

Predetermined overhead rate is an estimated ratio of overhead cost to the activity-base assigned to it.

Base can be estimated machine hours or estimated direct labour hours.

This predetermined rate will be used to allocate the overhead cost to the production process.

The formula for pre-determined overhead rate is-

Estimated manufacturing cost ÷ Estimated machine-hours.

13. Answer-(C). Credit to manufacturing overhead of $ 92,000.

Explanation-

The journal entry to record the application of manufacturing overhead to work in process would be-

Work in process. Debit. $92,000.

Manufacturing overhead. Credit. $92,000.

( Being overhead applied to work in process inventory).

Thus, the journal entry to record the application of manufacturing overhead to work in process would include a credit to manufacturing overhead of $ 92,000.