I need help. At the beginning of the year, manufacturing overhead for the year w
ID: 2434457 • Letter: I
Question
I need help.At the beginning of the year, manufacturing overhead for the year was estimated to be $702,450. At the end of the year, actual direct labor-hours for the year were 33,100 hours, the actual manufacturing overhead for the year was $697,450, and manufacturing overhead for the year was overapplied by $40,680. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:
A) 31,500 direct labor-hours
B) 29,452 direct labor-hours
C) 31,276 direct labor-hours
D) 33,100 direct labor-hours
7.
On December 1, Catherman Corporation had $21,000 of raw materials on hand. During the month, the company purchased an additional $61,000 of raw materials. During December, $70,000 of raw materials were requisitioned from the storeroom for use in production. The debits to the Raw Materials account for the month of December total:
A) $82,000
B) $70,000
C) $61,000
D) $21,000
8.
Erholm Inc. has provided the following data for the month of March. The balance in the Finished Goods inventory account at the beginning of the month was $43,000 and at the end of the month was $42,000. The cost of goods manufactured for the month was $221,000. The actual manufacturing overhead cost incurred was $45,000 and the manufacturing overhead cost applied to Work in Process was $49,000. Assuming that the balance in the Manufacturing Overhead Account is reduced to zero, the adjusted cost of goods sold that would appear on the income statement for March is:
A) $218,000
B) $220,000
C) $222,000
D) $221,000
Explanation / Answer
Predetermined overhead rate = Estimated total manufacturing overhead Estimated total units Substituting the values in the above formula, we getPredetermined overhead rate = ($697,450 + $40,680) / 33,100
= $738,130 / 33,100
= $22.3 per direct labor hour Estimated direct labor hours at the beginning of the year are
Estimated hours = $702,450 / $22.3 = 31,500 hours. Therefore, the correct option is (A) 2) Beginning raw materials $21,000 (+) Purchase of materials $61,000 ----------------------------------------------------- Raw materials available for use $82,000
(-) Raw materials for December $70,000
------------------------------------------------------- Raw materials used in production $12,000 -------------------------------------------------------
The debits to the raw material for the month of december total $82,000 Therefore, the correct option is (A) 3) The cost of goods sold is computed as Beginning finished goods $43,000 (+) Cost of goods manufactured $221,000 ------------------------------------------------------------ Goods available for sale $264,000 (-) Ending finished goods $42,000 ------------------------------------------------------------- Cost of goods sold $222,000 ------------------------------------------------------------- The manufacturing overhead is overapplied by $4,000($49,000 - $45,000) This amount should be deducted from cost of goods sold $222,000 - $4,000 = $218,000 Therefore, the correct option is (A)