Question

1)

Selected accounts with amounts omitted are as follows

Work in Process
Aug. 1	Balance	260,530	Aug. 31	Goods finished	144,980
31	Direct materials	X
31	Direct labor	36,500
31	Factory overhead	X

Factory Overhead
Aug. 1 – 31	Costs incurred	103,630	Aug. 1	Balance	12,940
			31	Applied
				(30% of direct labor cost)	X

If the balance of Work in Process on August 31 is $198,090, what was the amount debited to Work in Process for direct materials in August?

a.$350,140

b.$495,120

c.$98,940

d.$35,090

2)

When Job 117 was completed, direct materials totaled $9,947; direct labor, $12,580; and factory overhead, $6,729. A total of 1,219 units were produced at a per-unit cost of

a.$29,256

b.$22,527

c.$1,219

d.$24

3)

Selected accounts with some amounts omitted are as follows

Work in Process
Aug. 1	Balance	252,600	Aug. 31	Goods finished	123,000
31	Direct materials	X
31	Direct labor	47,300
31	Factory overhead	X

Factory Overhead
Aug. 1 – 31	Costs incurred	93,500	Aug. 1	Balance	12,000
			31	Applied	X

If the balance of Work in Process on August 31 is $202,800, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?

a.$14,190

b.$12,000

c.$123,000

d.$93,500

4)

At the end of the year, overhead applied was $3,714,000. Actual overhead was $3,202,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to

a.increase by $512,000

b.decrease by $1,024,000

c.increase by $1,024,000

d.decrease by $512,000

Answer 1

1	The amount debited to Work in Process for direct materials in August= $35090 i.e. d
	Work in Process
	Aug. 1	Balance	260,530	Aug. 31	Goods finished	144,980
	31	Direct materials	35,090
	31	Direct labor	36,500
	31	Factory overhead	10,950		Balance	198,090
			343,070			343,070
	Factory Overhead
	Aug. 1 – 31	Costs incurred	103,630	Aug. 1	Balance	12,940
				31	Applied
					(30% of direct labor cost)	10,950
2	A total of 1,219 units were produced at a per-unit cost of $24 i.e. d
	Direct material	9,947
	Direct Labor	12,580
	Factory overhead	6,729
	Total cost	29,256
	No. of unit	1,219
	Per unit cost	$                         24.00
3	The amount debited to Work in Process for factory overhead in August was $14190 i.e. a
	Work in Process
	Aug. 1	Balance	$ 252,600.00	Aug. 31	Goods finished	$ 123,000.00
	31	Direct materials	$    11,710.00
	31	Direct labor	$    47,300.00		Balance	$ 202,800.00
	31	Factory overhead	$    14,190.00
			$ 325,800.00			$ 325,800.00
	Factory Overhead
	Aug. 1 – 31	Costs incurred	93,500	Aug. 1	Balance	12,000
				31	Applied	14190
4	Overhead applied was $3,714,000. Actual overhead was $3,202,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to increase by $512000 i.e. a
		Overhead applied	3,714,000
		Incurred	3,202,000
		Over appiled	512,000
		Increase in net income	512,000
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