Office Works has an order to manufacture several specialty products. The beginning cash and equity balances were
Question:
Office Works has an order to manufacture several specialty products. The beginning cash and equity balances were $105,000. All other beginning balances were $0. Use your T-account worksheet to record the following transactions:
- Purchased $50,000 of direct materials on account.
- Used $45,000 direct materials in production during the month.
- Manufacturing employees worked 6,400 hours and were paid at a rate of $8 per hour. Paid cash for the direct labor expense.
- The company applies OH based on direct labor cost. This year's annual overhead is estimated to be $500,000. The actual direct labor cost last year was $1,250,000. The company estimates it will spend $625,000 in labor cost this year.
- Compute and record the OH applied to the job.
- Completed units costing $50,000 during the month.
- Sold 6,000 units costing $6.50 during the month. The selling price is 30% above the cost. Received cash.
- This year, the company paid $40,000 cash for actual OH expenses incurred. Last year the company paid $65,000 cash for OH expenses. Record the actual OH costs.
- The company considers OH differences less than $4,000 to be immaterial. By how much was OH over applied or under applied? Record the difference.
Now, CHOOSE 6 CORRECT STATEMENTS from the choices below.
1. The predetermined overhead rate is?
2. The direct labor that is debited to labor expense is?
3. How much are the total current manufacturing costs?
4. How much revenue did the company earn?
5. By how much was MOH over/underapplied?
6. How much are the costs of goods manufactured?
Group of answer choices
The cost of goods manufactured is $39,000
The amount of sales revenue earned was $50,700
The direct labor that will be debited to direct labor expense is $0
The predetermined MOH rate is $..75
The total current manufacturing costs are $137,160
The predetermined MOH rate is $.80
The cost of goods manufactured is $40,000
The direct labor that will be debited to direct labor expense is $40,960
The amount of over/under applied MOH is $1,000
The direct labor that will be debited to direct labor expense is $51,200
The amount of over/under applied MOH is $0
The direct labor that will be debited to direct labor expense is $160,137
The amount of sales revenue earned was $50,000
The direct labor that will be debited to direct labor expense is $160,200
The amount of over/under applied MOH is $960
The cost of goods manufactured is $50,000
The predetermined MOH rate is $1.25
The amount of sales revenue earned was $39,000
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