al cost of $9,000 and consists of 21. The ending inventory of finished goods s t

Question

al cost of $9,000 and consists of 21. The ending inventory of finished goods s talcadrae fo overned applied to thesego ds is S3,000, and t he overhead rate is 75% of direct its. labor, how much direct materials cost was incurred in producing these units? a) $3,750 b) $2,000. c) $4,000. d) $6,000 c) $9,000. 22. Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include: A debit to Cost of Goods Sold for $600. a) b) A credit to Factory Overhead for $600. c) A credit to Finished Goods Inventory for S600. d) A debit to Work in Process Inventory for $600. e) A credit to Cost of Goods Sold for $600. 23. Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is: Debit Supervisor Wage Expense; credit Factory Wages Payable. b) a) Debit Factory Overhead; credit Factory Wages Payable. Debit Supervisor Wage Expense; credit Factory Overbead. c) d) Debit Factory Wages Payable; credit Factory Overhead. c) Debit Factory Wage Expense; credit Cash. 24. Minstrel Manufacturing uses a job order costing system. During one month Minstre purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the indirect labor used is: a) Debit Work in Process Inventory $150,000; credit Factory Wages Payable $150,000. b) Debit Work in Process Inventory $150,000; credit Cash $150,000. c) Debit Factory Wages Payable $150,000; credit Cash $150,000. d) DebitF e) Debit Work in Process Inventory $110,000, credit Cash $1 50,000

Explanation / Answer

21. Ans b

DM + DL + OH = Total cost

DM + ($3,000/.75) + $3,000 = $9,000

DM + $4,000 + $3,000 = $9,000

DM = $2,000

22. Ans E

Predetermined OH rate = $112,500/$125,000 = 90%;

OH applied = $120,000(.9) = $108,000

Applied $108,000 – Actual $107,400 = $600 overapplied (credit balance)

23. Ans b

Debit Factory Overhead; credit Factory Wages Payable

24.Ans a

Winp inventory 150000Dr, Factory wages payable 150000cr

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