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I’m working on a accounting practice test / quiz and need an explanation and answer to help me learn.

QUESTION 11

Bakersville Company is a manufacturing firm that uses job-order costing. The company’s inventory balances were as follows at the beginning and end of the year:

Beginning Balance

Ending Balance

Raw materials

$14,000

$22,000

Work in process

$27,000

$9,000

Finished goods

$62,000

$77,000

The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine-hours and incur $231,000 in manufacturing overhead cost. The following transactions were recorded for the year:

Raw materials were purchased, $315,000.

Raw materials were requisitioned for use       in production, $307,000 ($281,000 direct and $26,000 indirect).

The following employee costs were       incurred: direct labor, $377,000; indirect labor, $96,000; and       administrative salaries, $172,000.

Selling costs, $147,000.

Factory utility costs, $10,000.

Depreciation for the year was $127,000 of       which $120,000 is related to factory operations and $7,000 is related to       selling, general, and administrative activities.

Manufacturing overhead was applied to       jobs. The actual level of activity for the year was 34,000 machine hours.

Sales for the year totaled $1,253,000.

Required:

a. Prepare a schedule of the cost of goods manufactured

b. Was the overhead under-allocated or overallocated? By how much?

c. Prepare an income statement for the year. The company closes any under-allocated or overallocated overhead to                  the Cost of Goods Sold.

QUESTION 12

Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at $50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000, and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs.

Required:

Job #461 contained 100       units. Determine the unit product cost that would appear on the job cost       sheet.

Determine the       underallocated or overallocated overhead for the year.

QUESTION 13

Summarize the evolution of cost processing in Greece from 1985-2015.

  
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