7.The following entry would be used to record depreciation on manufacturing equipment:
| Manufacturing Overhead | XXX | |
| Accumulated Depreciation | XXX | |
A. True
B. False
8. If a company uses a predetermined overhead rate, actual manufacturing overhead costs of a period will be recorded in the Manufacturing Overhead account and will be recorded on the job cost sheets.
a. True
b. False
Weatherhead Inc. has provided the following data for the month of March. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
| Work In Process | Finished Goods | Cost of Goods Sold | Total | |||||||||
| Direct materials | $ | 4,240 | $ | 14,720 | $ | 41,880 | $ | 60,840 | ||||
| Direct labor | 10,440 | 29,440 | 83,840 | 123,720 | ||||||||
| Manufacturing overhead applied | 5,830 | 12,010 | 34,980 | 52,820 | ||||||||
| Total | $ | 20,510 | $ | 56,170 | $ | 160,700 | $ | 237,380 | ||||
Manufacturing overhead for the month was overapplied by $3,200.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The work in process inventory at the end of March after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: Round intermediate percentage computations to the nearest whole percent.)
a.$20,818
b.$20,747
c.$20,158
d.$20,229
10.
Tiehen Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold. Its balance sheet on April 1 appears below:
| Tiehen Corporation Balance Sheet April 1 |
||||||
| Assets: | ||||||
| Cash | $ | 10,800 | ||||
| Raw materials | $ | 4,800 | ||||
| Work in process | 15,800 | |||||
| Finished goods | 19,800 | 40,400 | ||||
| Property, plant, and equipment (net) | 229,800 | |||||
| Total assets | $ | 281,000 | ||||
| Liabilities and Stockholders' Equity: | ||||||
| Accounts payable | $ | 15,400 | ||||
| Retained earnings | 265,600 | |||||
| Total liabilities and stockholders' equity | $ | 281,000 | ||||
Summaries of the transactions completed during April appear below:
| (1) | Raw materials purchased on account | $ | 66,800 |
| (2) | Raw materials used in production (direct materials) | $ | 50,800 |
| (3) | Raw materials used in production (indirect materials) | $ | 7,400 |
| (4) | Direct labor paid in cash | $ | 95,800 |
| (5) | Indirect labor paid in cash | $ | 25,800 |
| (6) | Selling and administrative salaries paid in cash | $ | 30,800 |
| (7) | Factory utility costs (on account) | $ | 12,800 |
| (8) | Depreciation on PP&E--manufacturing equipment | $ | 10,800 |
| (9) | Depreciation on PP&E--selling and administration | $ | 2,400 |
| (10) | Advertising expenses paid in cash | $ | 15,800 |
| (11) | Manufacturing overhead applied to production | $ | 59,400 |
| (12) | Cost of goods manufactured | $ | 196,800 |
| (13) | Cash sales | $ | 285,000 |
| (14) | Cost of goods sold | $ | 205,800 |
| (15) | Cash payments to creditors | $ | 81,800 |
| (16) | Overapplied (underapplied) overhead | ? | |
Homework Answers
Solution
7.
True
Explanation:
All manufacturing cost other than direct material and direct labour are included in manufacturing overhead. So when depreciation is charged on manufacturing equipment, it is debited in manufacturing overhead and credited in accumulated depreciation.
8. False
Explanation:
When predetermined overhead rate are used than actual manufacturing overhead is recorded in manufacturing overhead account, but it will not be recorded in job cost sheets
post the other questions separately, please
Add Answer to:
7.The following entry would be used to record depreciation on manufacturing equipment: Manufacturing Overhead XXX...
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Assets:
Cash
$
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Raw materials
$
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Work in process
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Finished goods
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