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all manufacturing costs, except direct materials and direct labor.
Manufacturing overhead consists of:
T/F: A variable cost is a cost whose cost per unit varies as the activity level rises and falls.
T/F: The traditional format income statement is used as an internal planning and decision-making tool. Its
emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and
The following costs were incurred in September:
Direct Materials (39,000)
Direct Labor (23,000)
Manufacturing overhead (17,000)
Selling Expenses (14,000)
Admin Expenses (27,000)
Prime costs during the month totaled:
If the cost of direct materials used to make furniture is based on units of production, is this cost
The Cost of Goods Manufactured to be understated
In computing its predetermined overhead rate, Marple Company inadvertently left its indirect labor costs
out of the computation. This oversight will cause:
Debit to Manufacturing Overhead, Credit to Cost of Goods Sold
A proper journal entry to close overapplied manufacturing overhead to Cost of Goods Sold would be:
Debit to Manufacturing Overhead, Credit to Wages Payable
The journal entry to record the incurrence of indirect labor costs is:
Crinks Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the
year, the estimated direct labor-hours were 11,200 hours and the total estimated manufacturing overhead
was $259,840. At the end of the year, actual direct labor-hours for the year were 10,800 hours and the
actual manufacturing overhead for the year was $254,840. Overhead at the end of the year was:
Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the
upcoming year. At the beginning of the most recently completed year, the company estimated the laborhours for the upcoming year at 52,000 labor-hours. The estimated variable manufacturing overhead was
$2.78 per labor-hour and the estimated total fixed manufacturing overhead was $1,192,360. The actual
labor-hours for the year turned out to be 52,600 labor-hours. The predetermined overhead rate for the
recently completed year was closest to:
The following data have been recorded for recently completed Job 674 on its job cost sheet. Direct
materials cost was $2,039. A total of 32 direct labor-hours and 175 machine-hours were worked on the
job. The direct labor wage rate is $14 per labor-hour. The company applies manufacturing overhead on
the basis of machine-hours. The predetermined overhead rate is $15 per machine-hour. The total cost for
the job on its job cost sheet would be:
credit to Work in Process of 60,000
During February, Degan Inc. transferred $60,000 from Work in Process to Finished Goods and recorded
a Cost of Goods Sold of $65,000. The journal entries to record these transactions would include a:
During July at Tiner Corporation, $74,000 of raw materials were requisitioned from the storeroom for
use in production. These raw materials included both direct and indirect materials. The indirect materials
totaled $7,000. The journal entry to record this requisition would include a debit to Manufacturing
Work in Process Inventory
In a job-order costing system, direct labor cost is ordinarily debited to:
the balances on the job cost sheets of uncompleted jobs
The balance in the Work in Process Inventory account equals:
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