At the beginning of the year, Eastside Auto had an inventory of $500,000. During the year, the company purchased goods costing $1,500,000. If Eastside Auto reported ending inventory of $400,000 and sales of $2,000,000, their cost of goods sold and gross profit rate must be
a) $1,100,000 and 20%
b) $1,600,000 and 30%
c) $1,100,000 and 45%
d) $1,600,000 and 20%
At the beginning of the month, Arthur's Olde Consulting Corporation had two jobs in process that had the following costs assigned from previous months:
Job Number Direct Labor Applied Overhead
SY-400 23040 13824
SY-403 15120 9072
During the month, Jobs SY-400 and SY-403 were completed but not billed to customers. The completion costs for SY-400 required $25,200 in direct labor. For SY-403, $72,000 in labor was used. During the month, the only new job, SY-404, was started but not finished. Total direct labor costs for all jobs amounted to $148,320 for the month. Overhead in this company refers to the cost of work that is not directly traced to particular jobs, including copying, printing, and travel costs to meet with clients. Overhead is applied at a rate of 60 percent of direct labor costs for this and previous periods. Actual overhead for the month was $90,000.
Required:
SY-400 SY-403
The costs of Jobs at the beginning of the month
The costs of Jobs when completed
What is the cost of Job SY-404 at the end of the month?
How much was under- or overapplied service overhead for the month?
At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following:
Accounts receivable
$145,000
Allowance for uncollectible accounts (credit balance)
3,500
During the last quarter of 2012, MTMC completed the following selected transactions:
Dec 28
Wrote off accounts receivable as uncollectible: Regan, Co., $1,300; Owen Mac, $900; and Rain, Inc., $700.
Dec 31
Recorded uncollectible account expense based on the aging of accounts receivable, as follows:
Age of Accounts
Accounts receivable
1–30 Days
31–60 Days
61–90 Days
Over 90 Days
$165,000
$97,000
$ 37,000
$ 14,000
$ 17,000
Estimated percent uncollectible
0.3%
3%
30%
35%
Requirements
1. Journalize the transactions.
2. Open the Allowance for uncollectible accounts T-account, and post entries affecting that account. Keep a running balance.
3. Show how Mountain Terrace Medical Center should report net accounts receivable on its December 31, 2012 balance sheet. Use the three line repo
Andujo Company allocates materials handling cost to the company's two products using the below data:
Modular Homes Prefab Barns
Total expected units produced 7,900 15,200
Total expected material moves 690 1,040
Expected direct labor-hour per unit 1,100 750
The total materials handling cost for the year is expected to be $122,000.
If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost would be allocated to the Prefab Barns?
a) $45,078
b) $107,351
c) $83,670
d) $69,198
Andris Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools(and Activity Measures) Estimated Overhead Costs
Machine related (machine-hours).............. $48,642
Batch setup (setups)............................... $438,750
General Factory (direct labor-hours).......... $234,312
Expected Activity
Activity Cost Pools Product X Product Y Total
Machine related... 3,010 1,010 4,020
Batch setup......... 3,010 4,010 7,020
General Factory... 7,010 8,010 15,020
Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:
a) $333,902
b) $360,852
c) $310,402
d) $438,750
Andris Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools (and Activity Measures) Estimated Overhead Costs
Machine related (machine-hours).............. $48,642
Batch setup (setups)............................... $438,750
General Factory (direct labor-hours).......... $234,312
Expected Activity
Activity Cost Pools Product X Product Y Total
Machine related... 3,010 1,010 4,020
Batch setup......... 3,010 4,010 7,020
General Factory... 7,010 8,010 15,020
The activity rate for the batch setup activity cost pool is closest to:
a) $145.76
b) $101.50
c) $62.50
d) $109.41
Amy Electronics makes CD players in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work in process inventory on October 31. In mid-November, Amy Electronics started production on 125,000 CD players. Of this number, 95,800 CD players were assembled during November and transferred out to the Programming Department. The November 30 Work in process inventory in the Assembly Department was 25% of the way through the assembly process. Direct materials costing $437,500 were placed in production in Assembly during November, and Direct labor of $200,800 and Manufacturing overhead of $134,275 were assigned to that department.
Requirements
1. Compute the number of equivalent units and the cost per equivalent unit in the Assembly Department for November.
2. Assign total costs in the Assembly Department to (a) units completed and transferred to Programming during November and (b) units still in process at November 30.
3. Prepare a T-account for Work in process inventory—Assembly to show its activity during November, including the November 30 balance.
Almeda ducts, Inc., uses a job-order costing system. The company's inventory balances on April 1, the start of its fiscal year, were as follows:
Raw materials $15,400
Work in process $10,400
Finished goods $32,400
During the year, the following transactions were completed:
a. Raw materials were purchased on account, $200,000.
b. Raw materials were issued from the storeroom for use in production, $190,500 (80% direct and 20% indirect).
c. Employee salaries and wages were accrued as follows: direct labor, $72,000; indirect labor, $26,000; and selling and administrative salaries, $80,000.
d. Utility costs were incurred in the factory, $41,000.
e. Advertising costs were incurred, $49,000.
f. Prepaid insurance expired during the year, $10,000 (90% related to factory operations, and 10% related to selling and administrative activities).
g. Depreciation was recorded, $59,000 (85% related to factory assets, and 15% related to selling and administrative assets).
h. Manufacturing overhead was applied to jobs at the rate of 175% of direct labor cost.
i. Goods that cost $324,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.
j. Sales for the year totaled $700,900 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $325,000.
Requirements:
1. Prepare journal entries to record the transactions for the year.
2. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, Manufacturing Overhead, and Cost of Goods Sold. Post the appropriate parts of your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account
3:
(a) Is Manufacturing Overhead underapplied or overapplied for the year? (Input the amount as positive value.
(b) Prepare a journal entry to close this balance to Cost of Goods Sold.
4. Prepare an income statement for the year.
Alam Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:
Estimated Overhead Costs Expected Activity
Activity 1...... $31,808 1,280
Activity 2...... $31,868 2,480
Activity 3..... $68,286 2,280
Actual costs and activities for the current year were as follows:
Actual Overhead Costs Actual Activity
Activity 1...... $31,718 1,265
Activity 2...... $31,743 2,495
Activity 3..... $68,261 2,305
The total debits to the Manufacturing Overhead account during the year were closest to:
a) $131,722
b) $131,962
c) $133,135
d) $132,531
After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2011, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2011) follows.
No. Account Title Debit Credit
Business Solutions had the following transactions and events in December 2011.
Dec. 2 Paid $1,010 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.
3 Paid $410 cash for minor repairs to the company’s computer.
4 Received $4,750 cash from Alex’s Engineering Co. for the receivable from November.
10 Paid cash to Lyn Addie for six days of work at the rate of $110 per day.
14 Notified by Alex\'s Engineering Co. that Business Solutions’ bid of $7,300 on a proposed project has been accepted. Alex’s paid a $2,300 cash advance to Business Solutions.
15 Purchased $1,200 of computer supplies on credit from Harris Office Products.
16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.
20 Completed a project for Liu Corporation and received $6,075 cash.
22–26 Took the week off for the holidays.
28 Received $3,100 cash from Gomez Co. on its receivable.
29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.30 per mile).
31 S. Rey withdrew $1,200 cash from the company for personal use.
The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company\'s first three months:
a. The December 31 inventory count of computer supplies shows $630 still available.
b. Three months have expired since the 12-month insurance premium was paid in advance.
c. As of December 31, Lyn Addie has not been paid for four days of work at $110 per day.
d. The company\'s computer is expected to have a four-year life with no salvage value.
e. The office equipment is expected to have a five-year life with no salvage value.
f. Three of the four months\' prepaid rent has expired.
Required:
1. Prepare journal entries to record each of the December transactions and events for Business Solutions.
2.1 Prepare adjusting entries to reflect a through f.
2.2 Post the journal entries to record each of the December transactions and adjusting entries to the accounts in the ledger.
3. Prepare an adjusted trial balance as of December 31, 2011. (The items in the Trial Balance should be grouped as follows: Assets and Liabilities (in order of their liquidity) then Equity, Revenues, and Expenses.
4. Prepare an income statement for the three months ended December 31, 2011.
5. Prepare a statement of owner’s equity for the three months ended December 31, 2011.
6. Prepare a balance sheet as of December 31, 2011.
Addy Company makes two products: Product A and Product B. Annual production and sales are 1,700 units of Product A and 1,100 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $98,785.
The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Estimated Expected Activity
Overhead Product
Activity 1 Costs Product A B Total
Activity 1 $30,528 1,000 600 1,600
Activity 2 17,385 1,700 200 1,900
General Factory 50,872 510 660 1170
Total $98,785
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)
The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:
a) $51.99
b) $10.23
c) $86.93
d) $9.15
Acton Company has two products: A and B. The annual production and sales of Product A is 830 units and of Product B is 530 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.6 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $92,203. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Estimated Overhead Expected Activity
Activity Cost Pool Costs Product A Product B Total
Activity 1............. $14,502 530 630 1,160
Activity 2............. $64,950 2,530 530 3,060
General Factory... $12,751 498 265 763
Total................... $92,203
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)
The predetermined overhead rate under the traditional costing system is closest to: (Round your final answer to two decimal places.)
a) $16.71
b) $21.23
c) $120.84
d) $12.50
Acton Company has two products: A and B. The annual production and sales of Product A is 830 units and of Product B are 530 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.6 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $92,203. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Estimated Overhead Expected Activity
Activity Cost Pool Costs Product A Product B Total
Activity 1............. $14,502 530 630 1,160
Activity 2............. $64,950 2,530 530 3,060
General Factory... $12,751 498 265 763
Total................... $92,203
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)
The overhead cost per unit of Product B under the traditional costing system is closest to: (Round your final answer to two decimal places.)
a) $10.61
b) $13.78
c) $8.92
d) $60.42
Accounts receivable arising from sales to customers amounted to $80,000 and $120,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $2,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
a) $2,040,000
b) $2,000,000
c) $1,200,000
d) $1,960,000
Accounts receivable arising from sales to customers amounted to $80,000 and $100,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
a) $20,000
b) $1,020,000
c) $1,000,000
d) $980,000
Accounts receivable arising from sales to customers amounted to $100,000 and $80,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
a) $20,000
b) $980,000
c) $1,020,000
d) $1,000,000
ABC Company borrows money from a bank by issuing a 90 day, 6%, $5,000 note on November 1.
Required:
Prepare properly dated and formatted journal entries to:
1) Record the Journal entry needed when the note was issued
2) Record the journal entry to record the interest as of December 31
3) Record the journal entry when the note matures and is paid.
Hint:
See page 373 end of period interest adjustment. As the book notes on page 372 in red print, it’s common to use 360 days as a year. Follow this convention.
Part 2
On September 21, 2009, Lawn Outfitters sells a riding mower for $3,000 with a one-year warranty that covers parts. Warranty expense is estimated at 4% of sales. On July 24, 2010, the mower is brought in for repairs covered under the warrantee requiring $55 in materials taken from the Repair Parts Inventory.
Required:
1) Prepare a properly dated and formatted Journal Entry regarding the Estimated Warrantee Liability and Warrantee Expense at the time of the sale, and
2) A properly dated and formatted Journal Entry recording the repair.
Hint:
See pages 378 – 379.
Sold land costing $320,000 for $400,000 cash, yielding a gain of $80,000.
b. Paid $109,000 cash for a new truck.
c. Equipment with a book value of $80,000 and an original cost of $169,000 was sold at a loss of $32,000.
d. Long-term investments in stock were sold for $90,700 cash, yielding a gain of $14,750.
Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
A sales invoice included the following information: merchandise price, $5,000; freight, $900; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $700 is granted prior to payment, that the freight is has already been prepaid by the seller, and that the invoice is paid within the discount period, what is the remaining amount of cash that should be received by the seller?
a) $4,300
b) $3,400
c) $4,950
d) $4,257
A rather large candy company is attempting to determine the profitability of each of their customers. They are applying activity based costing methods to their overhead costs for marketing administrative, collection and customer service cost. Determine the amount of overhead allocated to the customers below using activity based costing to allocate the overhead. The Overhead costs and related cost drivers are as follows:
Cost Pool
Expected Annual Cost
Cost Driver
Expected Level of Cost Driver
Delivery Costs
$500,000
Nbr of miles
1,000,000 miles
driven
Telephone Ordering Costs
$100,000
Nbr of
1,000,000 minutes
1) Compute the amount of overhead allocated to Customers X, Y, and Z
2) Compute the profitability of Customers X, Y, and Z
(Put your answers on the chart below. Show your work.)
Overhead Allocated to:
Customer X
Customer Y
Customer Z
Profitability of Customers:
Customer X
Customer Y
Customer Z
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Young's total share of net loss for the first year?
A. $3,900 loss.
B. $11,700 loss.
C. $10,400 loss.
D. $24,700 loss.
E. $9,100 loss.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Young's total share of net income for the second year?
A. $17,160 income.
B. $4,160 income.
C. $19,760 income.
D. $17,290 income.
E. $28,080 income.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Thurman's total share of net loss for the first year?
A. $3,900 loss.
B. $11,700 loss.
C. $10,400 loss.
D. $24,700 loss.
E. $9,100 loss.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Thurman's total share of net income for the second year?
A. $17,160 income.
B. $4,160 income.
C. $19,760 income.
D. $17,290 income.
E. $28,080 income.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was the balance in Young's Capital account at the end of the first year?
A. $120,900.
B. $118,300.
C. $126,100.
D. $80,600.
E. $111,500.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was the balance in Thurman's Capital account at the end of the second year?
A. $133,380.
B. $84,760.
C. $105,690.
D. $132,860.
E. $71,760.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was the balance in Thurman's Capital account at the end of the first year?
A. $120,900.
B. $118,300.
C. $126,100.
D. $80,600.
E. $111,500.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was the balance in Eaton's Capital account at the end of the second year?
A. $133,380.
B. $84,760.
C. $105,690.
D. $132,860.
E. $71,760.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Eaton's total share of net loss for the first year?
A. $3,900 loss.
B. $11,700 loss.
C. $10,400 loss.
D. $24,700 loss.
E. $9,100 loss.
A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Eaton's total share of net income for the second year?
A. $17,160 income.
B. $4,160 income.
C. $19,760 income.
D. $17,290 income.
E. $28,080 income.
A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. What the amount is of over applied or under applied overhead at the end of the year?
a) $34,400 over applied
b) $18,400 over applied
c) $34,400 under applied
d) $18,400 under applied
A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. The entry to assign overhead costs during the year would be
a) Overhead 720,000
Cash 720,000
b) WIP Inventory 736,000
Overhead 736,000
c) Cash 754,400
Overhead 754,400
d) Overhead 754,400
WIP Inventory 754,400
A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. The entry to assign overhead costs during the year would be
a) Overhead 720,000
Cash 720,000
b) WIP Inventory 736,000
Overhead 736,000
c) Cash 754,400
Overhead 754,400
d) Overhead 754,400
WIP Inventory 754,400
