Question

1. The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:

Multiple Choice

Jobs Overhead Expense.

Cost of Goods Sold.

Finished Goods Inventory.

Indirect Labor.

Work in Process Inventory.

2. Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 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

$5,500

$11,500

$6,500

$9,500

$14,500

3.

Beginning WIP	4,500
Direct materials	47,100
Direct labor	29,600
Applied Overhead	15,800
Total Manufacturing Costs	97,000
To Finished Goods			?
Ending WIP	8,900

The cost of units transferred to finished goods is:

Multiple Choice

$97,000.

$105,900.

$88,100.

$95,200.

$92,500.

4. Equivalent units of production are equal to:

Multiple Choice

The number of units that could have been started and completed given the costs incurred during the period.

The number of finished units actually produced during a period.

The number of units started into the process during a period.

The number of units still in process at the end of a period.

Physical units that were started and completed during a period.

5. K Company estimates that overhead costs for the next year will be $2,970,000 for indirect labor and $990,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 99,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 4 direct labor hours?

Multiple Choice

$40.00

$30.00

$160.00

$120.00

None of the choices

Answer 1

1) Work in Progress Inventory

2) $ 14,500

Work in Progress = Direct Material + direct Labor + Overhead = $2,500 + $4,000 + $4,000*200%

= $14,500

3) $88,100

Cost of goods transferred to finished goods

= Beginnig WIP + Direct material + Direct labor + Overhead - Closing WIP

= $4,500 + $47,100 + $29,600 +$15,800 - $8,900

=$88,100

4) The number of units that could have been started and completed given the costs incurred during the period.

5) $160.00

Overhead allocation per hour = ($2,970,000 +$990,000) / 99,000 = $40 per hour

for 4 direct labour hours = 4 * $40 = $160