ACCT 221 Exam 2

Schedule of Costs of Goods Manufactured

7. Alaska Corporation purchased, on account, 6,600 pounds of raw materials at $6.50 per pound on January 2, 2019. The production manager requisitioned and received 2,350 pounds of raw material into production on January 15. Use this information to prepare the General Journal entries (without explanation) for January 2 and January 15. If no entry is required then write "No Entry Required."

General Journal:

Date	Accounts	Debit	Credit
1/1/19
1/15/19

Question 8 (10 points)

 

Warren Company uses a job order cost system and applies overhead based on estimated rates.  The overhead application rate is based on total estimated overhead costs of $280,000 and direct labor hours of 20,000. During the month of February 2019, Job 2-1 incurred direct labor of 450 hours. Use this information to prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month. If no entry is required then write "No Entry Required."

General Journal:

Date	Accounts	Debit	Credit
2/28/19

Question 9 (5 points)

 

During March 2019, Virginia Bay Corporation recorded $275,000 of costs related to factory overhead.  Virginia Bay's overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $256,000 would be incurred, and 6,000 direct labor hours would be worked.  During March, 11,000 hours were actually worked. Use this information to determine the standard overhead rate.  (round & enter any final dollar answers to the nearest cent):

YOUR ANSWER:

Question 10 (5 points)

 

During March 2019, Roberts Corporation recorded $242,000 of costs related to factory overhead.  Alaska's overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $250,000 would be incurred, and 12,500 direct labor hours would be worked.  During March, 12,300 hours were actually worked. Use this information to determine the amount of overhead over or under applied.  Enter overapplied overhead as a negative number. (round & enter any final dollar answers to the nearest whole dollar)

YOUR ANSWER:

Question 11 (10 points)

 

On March 31, 2019, Dorchester Corporation recorded the following factory overhead costs incurred:

            Factory Manager Salary                  $5,500

            Factory Utilities                                  2,800

            Machinery Deprecation                      9,000

            Machinery Repairs                             1,800

            Factory Rent                                       2,000

The overhead application rate is based on direct labor hours.  The preset formula for overhead application estimated that $22,000 would be incurred, and 2,000 direct labor hours would be worked. During March, 650 hours were actually worked on Job Order 3-1 and 1,200 hours were actually worked on Job Order 3-2. Use this information to prepare the March 31 General Journal entries, without explanations, for the: (round any final dollar answers to the nearest whole dollar):

            1. to record the factory overhead costs

            2. the allocation of factory overhead to Job Order 3-1

            3. the allocation of factory overhead to Job Order 3-2

            4. the adjusting entry to dispose of any over or under application of factory overhead

General Journal:

Date	Accounts	Debit	Credit
3/31/19
3/31/19
3/31/19
3/31/19

 

Question 12 (5 points)

 

March 1, 201, Dorchester Company's beginning work in process inventory had 7,000 units. This is its only production department. Beginning WIP units were 50% complete as to conversion costs. Dorchester introduces direct materials at the beginning of the production process.  During March, all beginning WIP was completed and an additional 13,500 units were started and completed. Dorchester also started but did not complete 5,500 units.  These units remained in ending WIP inventory and were 60% complete as to conversion costs. Dorchester uses the weighted average method. Use this information to determine for March 2019 the equivalent units of production for conversion costs. (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)

YOUR ANSWER:

Question 13 (5 points)

 

Dorchester Company, on March 1, 2019 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Dorchester started into production 18,500 units. At the end of the month there were 11,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 45% complete with respect to conversion. For the month of March the following costs were incurred and recorded in the WIP:

            Direct Material                      $11,000

            Direct Labor                              17,000

            Factory Overhead                    25,000

Dorchester uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of conversion for the month of March: (Round & enter final answers to the nearest cent.)

YOUR ANSWER:

Question 14 (1 point)

 

Manufacturing costs or product costs consist of:

Question 14 options:

	A)  direct materials, direct labor, and factory overhead.
	B)  direct materials and direct labor.
	C)  factory overhead.
	D)  None of these.
	E)  direct labor and factory overhead.

Question 15 (1 point)

 

Under normal circumstances, the Work in Process account used in a job order cost system:

Question 15 options:

	A)  will include only charges for direct labor and direct material.
	B)  will include charges for direct labor, direct material, and actual overhead.
	C)  None of these.
	D)  will include charges for direct labor, direct material, and applied overhead.
	E)  will include only charges for direct materials and applied overhead.

Question 16 (2 points)

 

Boulder Company uses a job order cost system and applies overhead based on estimated rates.  The overhead application rate is based on total estimated overhead costs of $300,000 and direct labor hours of 60,000.  For job 8365, direct labor hours were 500.

Question 16 options:

	A)  Overhead Expense should be credited for $3,000.
	B)  Factory Overhead should be credited for $3,000.
	C)  Overhead Expense should be debited for $3,000.
	D)  None of these.
	E)  Factory Overhead should be debited for $3,000.

Question 17 (2 points)

 

Which of the following sequences describes cost flow in a job cost system?

Question 17 options:

	A)  Materials, work in process, cost of goods sold, finished goods.
	B)  Work in process, materials, cost of goods sold, finished goods.
	C)  Work in process, materials, finished goods, cost of goods sold.
	D)  None of these.
	E)  Materials, cost of goods sold, work in process, finished goods.

Question 18 (2 points)

 

An equivalent unit of material is equal to:

Question 18 options:

	A)  the amount of material necessary to complete one unit of production.
	B)  fifty percent of the material cost of a unit of finished goods.
	C)  a unit of work in process inventory.
	D)  the amount of material necessary to start a unit of production into work in process.
	E)  None of these.

Question 19 (2 points)

 

Which of the following statements is true regarding average fixed costs?            

Question 19 options:

	A)  Average fixed costs per unit fall as the level of activity rises.
	B)  Average fixed costs per unit remain fixed regardless of level of activity.
	C)  Average fixed costs per unit rise as the level of activity rises.
	D)  Average fixed costs per unit cannot be determined.
	E)  Average fixed costs per unit rise as the level of activity rises.

Question 20 (2 points)

 

Variable costs are expenses that ________.           

Question 20 options:

	A)  remain constant on a per-unit basis but change in total based on activity level
	B)  remain constant on a per-unit basis and remain constant in total regardless of activity level
	C)  decrease on a per-unit basis as activity level increases
	D)  remain constant in total regardless of activity level within a relevant range
	E)  none of these answers is correct

Question 21 (2 points)

 

In a job order cost system, indirect labor incurred is debited to which account?

 

Question 21 options:

	A)  work in process inventory
	B)  finished goods inventory
	C)  manufacturing overhead
	D)  cost of goods sold
	E)  any of these is correct