At Allen Company, manufacturing overhead is applied based on direct labor hours. Overhead was estimated to...

 

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At Allen Company, manufacturing overhead is applied based on direct labor hours. Overhead was estimated to be $540,000 and direct labor hours were estimated to be 360,000. Actual direct labor hours and actual direct labor costs for the year amounted to 400,000 hours and $700,000. In addition, Allen Company incurred the following actual costs during the year: •Administrative expenses, $100,000 • Depreciation expense on fixed assets, $500,000 (80% of the depreciation expense was related to manufacturing activities) * Indirect material costs, S25,000 *Indirect labor costs, $45,000 •Utility expense on the manufacturing facility, $125,000 *Insurance expense on the manufacturing facility, $35,000 •Marketing expenses, $75,000 •Sales & promotion expenses, $25,000 Allen Company had the following inventory balances at the beginning and end of the year: Finished goods Work in process Raw (direct) materials January 1 December 31 $675,000 650,000 $450,000 600,000 350,000 400,000 During the year, the company purchased S150,000 of raw materials and generated sales of $2, 500,000. 5. What amount of raw materials were used during the period? 6. What is the amount of prime costs? 7. What is the predetermined manufacturing overhead rate? 8. What amount is applied to manufacturing overhead? 9. What is the amount of Manufacturing Costs added for the period2 9. What is the amount of Manufacturing Costs added for the period? 10. What is the Cost of Goods Manufactured? 11. At the end of year, was manufacturing overhead over- or under-applied? 12. Refer to the previous question. By what amount was manufacturing overhead over- or under -applied? 13. What is Cost of Goods Sold, after adjusting for any under-or over-applied overhead? 14. What is Gross Profit? 15. What are total Selling, General & Administrative Expenses? 16. What is Net Income or Loss? Page | 2 17. The journal entry to transfer costs to work in process includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 18. Refer to the previous question. The amount of the entry is: 19. The journal entry to transfer costs from work in process to finished goods includes a debit to which account? 19. The journal entry to transfer costs from work in process to finished goods includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 20. The journal entry to transfer costs from work in process to finished goods includes a credit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 21. Refer to the previous two questions. The amount of the entry is: 22. The journal entry to transfer costs from finished goods to cost of goods sold includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 23. The journal entry to transfer costs from finished goods to cost of goods sold includes a credit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 24. Refer to the previous two questions. The amount of the entry is: Page | 3 25. The journal entry at the end of the period to adjust for over- or under-applied overhead will include a: a. Debit to Selling, General and Administrative expenses b. Credit to Finished Goods c. Debit to Cost of goods sold d. Credit to Cost of goods sold e. None of the above 26. Refer to the previous question. The amount of the entry is: At Allen Company, manufacturing overhead is applied based on direct labor hours. Overhead was estimated to be $540,000 and direct labor hours were estimated to be 360,000. Actual direct labor hours and actual direct labor costs for the year amounted to 400,000 hours and $700,000. In addition, Allen Company incurred the following actual costs during the year: •Administrative expenses, $100,000 • Depreciation expense on fixed assets, $500,000 (80% of the depreciation expense was related to manufacturing activities) * Indirect material costs, S25,000 *Indirect labor costs, $45,000 •Utility expense on the manufacturing facility, $125,000 *Insurance expense on the manufacturing facility, $35,000 •Marketing expenses, $75,000 •Sales & promotion expenses, $25,000 Allen Company had the following inventory balances at the beginning and end of the year: Finished goods Work in process Raw (direct) materials January 1 December 31 $675,000 650,000 $450,000 600,000 350,000 400,000 During the year, the company purchased S150,000 of raw materials and generated sales of $2, 500,000. 5. What amount of raw materials were used during the period? 6. What is the amount of prime costs? 7. What is the predetermined manufacturing overhead rate? 8. What amount is applied to manufacturing overhead? 9. What is the amount of Manufacturing Costs added for the period2 9. What is the amount of Manufacturing Costs added for the period? 10. What is the Cost of Goods Manufactured? 11. At the end of year, was manufacturing overhead over- or under-applied? 12. Refer to the previous question. By what amount was manufacturing overhead over- or under -applied? 13. What is Cost of Goods Sold, after adjusting for any under-or over-applied overhead? 14. What is Gross Profit? 15. What are total Selling, General & Administrative Expenses? 16. What is Net Income or Loss? Page | 2 17. The journal entry to transfer costs to work in process includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 18. Refer to the previous question. The amount of the entry is: 19. The journal entry to transfer costs from work in process to finished goods includes a debit to which account? 19. The journal entry to transfer costs from work in process to finished goods includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 20. The journal entry to transfer costs from work in process to finished goods includes a credit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 21. Refer to the previous two questions. The amount of the entry is: 22. The journal entry to transfer costs from finished goods to cost of goods sold includes a debit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 23. The journal entry to transfer costs from finished goods to cost of goods sold includes a credit to which account? a. Cost of goods sold b. Finished goods c. Manufacturing overhead d. Work in process e. None of the above 24. Refer to the previous two questions. The amount of the entry is: Page | 3 25. The journal entry at the end of the period to adjust for over- or under-applied overhead will include a: a. Debit to Selling, General and Administrative expenses b. Credit to Finished Goods c. Debit to Cost of goods sold d. Credit to Cost of goods sold e. None of the above 26. Refer to the previous question. The amount of the entry is:

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formulas 5 raw material used opening inventory purchases closing inventory 100000 6 prime cost direct labor cost direct material cost 800000 7 predetermined manufacturing overhead rate estimated manuf... View the full answer