Use the following information to answer questions .
Allen Company applies manufacturing overhead on the basis of
direct labor hours. Overhead was estimated to be $500,000 and
direct labor hours were estimated to be 20,000.
During the year, Allen Company incurred actual overhead costs
of $510,000, actual direct labor hours of 21,000, and actual direct
labor costs of $615,000.
Allen Company had the following inventory balances at the
beginning and end of the year:
January 1 December 31
Finished goods $315,000 $325,000
Work in process 450,000 470,000
Raw material 320,000 325,000
During the year, the company purchased $230,000 of raw
materials.
1. The journal entry to transfer costs from work in process to
finished goods includes a debit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
2. The journal entry to transfer costs from work in process to
finished goods includes a credit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
3. Refer to the previous two questions. The amount of the
entry is:
4. The journal entry to transfer costs from finished goods to
cost of goods sold includes a debit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
5. The journal entry to transfer costs from finished goods to
cost of goods sold includes a credit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
6. Refer to the previous two questions. The amount of the
entry is:
7. The journal entry to dispose of over- or under- applied
manufacturing overhead includes a debit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
8. The journal entry to dispose of over- or under- applied
manufacturing overhead includes a credit to which account?
a. Manufacturing overhead
b. Work in process
c. Finished goods
d. Cost of goods sold
e. None of the above
9. Refer to the previous two questions. The amount of the
entry is:
10. State the information need to calculate net income.