1.A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:
- $2,500,000.
- $3,500,000.
- $2,000,000.
- $1,000,000.
- $3,000,000.
2.At the beginning of the recent period, there were 900 units of product in a department, one-third completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, one-fourth completed. Using the weighted average method, the equivalent units produced by the department were:
- 5,000 units.
- 5,900 units.
- 6,100 units.
- 5,500 units.
- 6,700 units.
3.Bard Manufacturing uses a job order cost accounting system. During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Bard incurred a factory payroll of $150,000, paid in cash, of which $40,000 is classified as indirect labor. Bard uses a predetermined overhead application rate of 150% of direct labor cost. If Bard incurred total overhead costs of $167,800 during the month, compute the amount of under- or overapplied overhead:
- $2,800 overapplied.
- $17,800 underapplied.
- $2,800 underapplied.
- $17,800 overapplied.
- $57,200 overapplied.
4.During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method.
- 165,000; 165,000.
- 135,000; 119,000
- 140,000; 130,250.
- 165,000; 144,000.
- 144,000; 144,000.
5.Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the issuance of materials to production is:
- Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000.
- Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000.
- Debit Raw Materials Inventory $195,000; credit Goods in Process Inventory $195,000.
- Debit Goods in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000.
- Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000.
6.Hancock Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Hancock incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the overhead application rate.
- 180%.
- 55.6%.
- 186%.
- 184%.
- 96.6%.
7.Which of the following statements is True regarding product and period costs?
- Office salaries expense is a product cost and factory maintenance is a period cost.
- Office rent is a product cost and supervisors' salaries expense is a period cost.
- Factory rent is a product cost and advertising expense is a period cost.
- Delivery expense is a product cost and indirect materials is a period cost.
- Sales commissions is a product cost and indirect labor is a period cost.