Question :
17) The overhead accounts closed or become zero at the : 1217182
17) The overhead accounts are closed or become zero at the end of each year.
18) Overallocated indirect costs occur when the allocated amount of indirect costs is greater than the amount incurred for that period.
19) The actual costs of all individual overhead categories are recorded in the Manufacturing Overhead Control account.
20) Proration is the spreading of underallocated or overallocated overhead among ending work in process, finished goods, and costs of goods sold.
21) It is inappropriate for service organizations such as public accounting firms to use job costing.
22) Pumpkin Plastic Products Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $9 per direct labor-hour. The following data are obtained from the accounting records for June 2010:
Direct materials $300,000
Direct labor (16,000 hours @ $11/hour) $ 44,000
Indirect labor $ 20,000
Plant facility rent $ 100,000
Depreciation on plant machinery and equipment $ 40,000
Sales commissions $ 30,000
Administrative expenses $ 40,000
Required:
a.What actual amount of manufacturing overhead costs was incurred during June 2010?
b.What amount of manufacturing overhead was allocated to all jobs during June 2010?
c.For June 2010, was manufacturing overhead underallocated or overallocated? Explain.
23) Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. Because the company used a budgeted indirect-cost rate for its manufacturing operations, the amount that was allocated ($435,000) to cost of goods sold was different from the actual amount incurred ($425,000).
Ending balances in the relevant accounts were:
Work-in-Process $ 40,000
Finished Goods 80,000
Cost of Goods Sold 680,000
Required:
a.Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts.
b.Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.
24) Jacobs Company manufactures refrigerators. The company uses a budgeted indirect-cost rate for its manufacturing operations and during 20X5 allocated $1,000,000 to work-in-process inventory. Actual overhead incurred was $1,100,000.
Ending balances in the following accounts are:
Work-in-Process $ 100,000
Finished Goods 750,000
Cost of Goods Sold 4,150,000
Required:
a.Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts.
b.Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.
25) The following information was gathered for Jasmine Company for the year ended December 31, 2010
BudgetedActual
Direct labor-hours75,000dlh80,000dlh
Factory overhead$600,000$625,000
Assume that direct labor-hours are the cost-allocation base.
Required:
a.Compute the budgeted factory overhead rate.
b.Compute the factory overhead applied.
c.Compute the amount of over/underapplied overhead.
