Question : 31.Ringgold Company had beginning finished goods inventory of $36,000. During : 1257041

 

 

31.Ringgold Company had beginning finished goods inventory of $36,000. During the period, the company produced goods that cost $150,000. If the ending balance in finished goods was $24,000, the amount of cost of goods sold was:   

A. $162,000.

 

B. $150,000.

 

C. $138,000.

 

D. none of these.

 

 

32.All of the following are reasons to assign estimated overhead to inventory except:   

A. managers need cost information as soon as possible after production.

 

B. managers need to know if production costs are higher than expected as soon as possible.

 

C. managers need to use estimated overhead to control earnings.

 

D. management reduces the distortions that would come from actual monthly overhead.

 

 

33.Coleridge Company estimates that its production workers will work 125,000 direct labor hours during the upcoming period and that overhead costs will amount to $750,000. Assume Overhead to be allocated on the basis of direct labor hours. What predetermined overhead rate would be used to apply overhead to production during the period?   

A. $6.00 per direct labor hour

 

B. $0.67 per direct labor hour

 

C. $0.67 per unit

 

D. $6.00 per unit

 

 

34.Lexington Company’s predetermined overhead rate is $4.00 per direct labor hour. Which of the following equations correctly computes the amount of overhead cost that should be applied to work in process assuming a job required 100 hours but was estimated to require 90 hours?   

A. 100 hours × $4 = $400

 

B. 90 hours × $4 = $360

 

C. 1 job × $4 = $4

 

D. None of these.

 

 

35.The cost of indirect labor will initially be charged to:   

A. cost of goods sold.

 

B. work in process.

 

C. manufacturing overhead.

 

D. wages expense.

 

 

36.Washington Company made the following estimates for the 2014 accounting period:Overhead costs: $250,000Direct labor hours: 50,000If 7,000 hours of labor are actually used in February, how much overhead cost would be allocated to work in process during the month? Assume Overhead to be allocated on the basis of direct labor hours.   

A. $7,000

 

B. $35,714

 

C. $35,000

 

D. $20,833

 

 

37.The Winchester Company estimates for the 2014 accounting period that its overhead costs will amount to $595,000 and that it will work 85,000 direct labor hours. If actual overhead costs for the year amounted to $599,000 and actual labor hours amounted to 87,000, then overhead would be:   

A. overapplied by $10,000.

 

B. underapplied by $10,000.

 

C. overapplied by $14,000.

 

D. underapplied by $4,000.

 

 

38.McDonnell Industries estimated manufacturing overhead for the year at $290,000. Manufacturing overhead for the year was underapplied by $12,000. The company applied $235,000 to work in process. The amount of actual overhead would have been:   

A. $247,000.

 

B. $278,000.

 

C. $223,000.

 

D. none of these.

 

 

39.During 2014, Jackson Company estimated that its manufacturing employees would work 88,000 direct labor hours. During the year the company actually worked 80,000 direct labor hours. Actual manufacturing overhead costs amounted to $344,000. Jackson applies overhead cost on the basis of direct labor hours. The manufacturing overhead account was overapplied by $16,000 during 2014. Based on this information the predetermined overhead rate was:   

A. $5.70 per labor hour.

 

B. $4.10 per labor hour.

 

C. $4.59 per labor hour.

 

D. $4.50 per labor hour.

 

 

40.Which of the following statements is true assuming the manufacturing overhead account is underapplied?   

A. The predetermined overhead rate is too high.

 

B. The amount of costs in work in process is less than actual production costs.

 

C. Cost of goods sold will be credited at the end of the period when the manufacturing overhead account is adjusted.

 

D. The manufacturing overhead applied must be less than the manufacturing overhead estimated.