Question

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on...

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:
Total machine-hours      30,500
Total fixed manufacturing overhead cost   $   610,000
Variable manufacturing overhead per machine-hour   $   6.00
Recently, Job T687 was completed with the following characteristics:
Number of units in the job      10
Total machine-hours      30
Direct materials   $   690
Direct labor cost   $   1,370
The unit product cost for Job T687 is closest to:
Multiple Choice
$147.00
$94.67
$206.00
$284.00

Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 35,900 machine-hours. The estimated variable manufacturing overhead was $4.80 per machine-hour and the estimated total fixed manufacturing overhead was $945,606. The predetermined overhead rate for the recently completed year was closest to:

Multiple Choice
$31.14 per machine-hour
$30.14 per machine-hour
$4.80 per machine-hour
$26.34 per machine-hour

During March, Zea Inc. transferred $58,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $64,000. The journal entries to record these transactions would include a:
Multiple Choice
credit to Cost of Goods Sold of $64,000.
debit to Finished Goods of $64,000.
credit to Work in Process of $58,000.
credit to Finished Goods of $58,000.

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $240,600 and 5,600 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,600 and actual direct labor-hours were 4,900.
The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
$30,096 underapplied
$32,096 underapplied
$30,096 overapplied
$32,096 overapplied

Homework Answers

Answer #1

1) Calculate unit product cost

Direct material 690
Direct labor 1370
Overhead (610000/30500+6)*30 780
Total Cost 2840
Unit 10
Unit product cost 284

So answer is d) $284

2) Predetermine overhead rate = (945606/35900+4.8) = 31.14 per MH

So answer is a) $31.14 per machine-hour

3) Journal entry

No General Journal Debit Credit
1 Finished goods 58000
Work in process 58000
2 Cost of goods sold 64000
Finished goods 64000

So answer is c) credit to Work in Process of $58,000

4) Overhead applied = 240600/5600*4900 = 210504

Actual overhead = 242600

Under applied overhead = 210504-242600 = 32096

So answer is b) $32,096 underapplied

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