Chapter 15 MGNT Flashcards

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accounting

Mercury manufactures boots. The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products.

The company estimates Mercury will manufacture 50,000 boots next year. For this amount of production, total factory overhead is estimated to be $797,600.00. Estimated direct labor costs for next year are$997,000.00.

The following information is taken from the records of Mercury on May 31 of the current year.

a. The total factory payroll for the month according to the payroll register is $154,860.00, distributed as follows.$

\begin{array}{lrlr}\text { Work in Process } & \$ 116,320.00 & \text { Employee Income Tax Payable } & \$ 17,255,00 \\ \text { Factory Overhead } & 38,540.00 & \text { Social Security Tax Payable } & 9,601,32 \\ \text { Cash } & 125,758.21 & \text { Medicare Tax Payable } & 2,245.47\end{array}

$b. The total of all requisitions of direct materials issued during the month is$128,688.00. The total of all requisitions of indirect materials issued during the month is $11,670.00.

c. Manufacturing expense accounts and their balances for the month are as follows:$

\begin{array}{lrlr}\text { Depreciation Expense-Factory Equipment } & \$ 2,947,20 & \text { Miscellaneous Expense } & \$ 640.00 \\ \text { Depreciation Expense-Building } & 1,440.00 & \text { Payroll Taxes Expense-Factory } & 21,680.40 \\ \text { Heat, Light, and Power Expense } & 4,620.00 & \text { Property Tax Expense-Factory } & 3,624.00 \\ \text { Insurance Expense-Factory } & 768.00 & \text { Supplies Expense-Factory } & 8,016.00\end{array}

$d. The total of all cost sheets completed during the month is$332,850.00.

e. The total of costs recorded on all sales invoices for May is $517,410.00.

Instructions:

Calculate Mercury's factory overhead applied rate for next year as a percentage of direct labor cost.
On May 3, Mercury began work on Job No. 283. The order is for 150 pairs of No. 52L boots for stock; date wanted May 13. Open a cost sheet for Job No. 283 and record the following items.

Transactions:
May 3.	Direct materials,$1,725.00. Materials Requisition No. 392.
3.	Direct labor, $258.00. Daily summary of job-time records.
4.	Direct labor,$496.00. Daily summary of job-time records.
5.	Direct materials, $945.00. Materials Requisition No. 399.
5.	Direct labor,$350.00. Daily summary of job-time records.
6.	Direct labor, $384.00. Daily summary of job-time records.
7.	Direct labor,$590.00. Daily summary of job-time records.
10.	Direct materials, $720.00. Materials Requisition No. 428.
10.	Direct labor,$330.00. Daily summary of job-time records.
11.	Direct labor, $304.00. Daily summary of job-time records.
12.	Direct labor,$248.00. Daily summary of job-time records.

Complete the cost sheet, recording factory overhead at the rate calculated in part (1).
Prepare a finished goods ledger card for Stock No. 52L boots. Minimum quantity is set at 100. Inventory location is Area C-50.
Record on the finished goods ledger card the beginning balance on May 1: 140 units at a unit cost of $60.90. Mercury uses the first-in, first-out method to record inventory costs.
Record the following transactions on the finished goods ledger card for 52L boots.

Transactions:
May 5.	Sold 60 pairs of 52L boots. Sales Invoice No. 633.
12.	Received 150 pairs of 52L boots. Record cost from cost sheet for Job No. 283.
18.	Sold 30 pairs of 52L boots. Sales Invoice No. 652.

Journalize the factory payroll entry on page 10 of a cash payments journal. C711.
Journalize the following entries on page 5 of a general journal.

a. An entry to transfer the total of all direct materials requisitions to Work in Process and indirect materials to Factory Overhead. M211.

b. An entry to close all individual manufacturing expense accounts to Factory Overhead. M212.

c. An entry to record applied factory overhead to Work in Process. M213.

Continue using page 5 of the general journal. Journalize the entry to close the balance of the Factory Overhead account to Income Summary. M214.
Journalize the entry to transfer the total of all cost sheets completed from Work in Process to Finished Goods. M215.
Journalize the entry to transfer the cost of products sold from Finished Goods to Cost of Goods Sold. M216.

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economics

Deadweight losses arising from an excise tax are greatest when demand:

a. and supply are relatively elastic.

b. is relatively inelastic and supply is relatively elastic.

c. and supply are relatively inelastic.

d. is relatively elastic and supply is relatively inelastic.

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accounting

The terms depreciation, depletion, and amortization all refer to the process of allocating the cost of an asset to the periods the asset is used. Required: Discuss the differences between depreciation, depletion, and amortization as the terms are used in accounting for property, plant, and equipment and intangible assets.

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business

Which of the following must be in writing to be enforceable by a court? (a) a lease for a period of two months (b) a lease for a period of six months (c) a lease for a period of one week or less (d) a lease for period of 24 months (e) both c and d

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