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The Watts Company uses predetermined overhead rates to y manufacturing overhead to jobs the predetermined overhead rate is based on labor cost in Dept A and on machine hours in Dept. 8. At the beginning of the year, the company made the following estimates: Dept. A Dept. B Direct Labor Cost $30,000 $40,000 Manufacturing Overhead 60.000 50,000 Direct Labor Hours 6,000 8.000 Machine Hours 10,000 2,000 What predetermined overhead rates would be used in Dept. A and Dept. 8. respectively? 50% and $8.00 50% and $5.00 $15 and 110% 200% and $5.00 Overapplied manufacturing overhead means that: a. the applied manufacturing overhead cost was less than the actual manufacturing overhead cost. b. the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. c. the estimated manufacturing overhead cost was less than the actual manufacturing overhead cost. d. the estimated manufacturing overhead cost was less than the applied manufacturing overhead cost. In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: a. Raw Materials inventory. b. Finished Goods inventory. c. Work in Process inventory. d. Cost of Goods Sold. Green Company's cost for the month of August were as follows: direct materials, $27,000; direct labor, $34.000, sales salaries, $14,000; indirect labor, $10,000, indirect material, $15,000, general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory. $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month? $105,000 $132.000 $138,000 $112,000

Answer 1

7. predetermined overhead ralē Estimated manufacturing Overhead cost Estimated total renits the allocation base is based on a ment A, allocation o nabour Cost. $60.000 vino 20 predetermined overhead sate =- $ 30,0000 200 / In case of Department B, allocation is based on machine hours in Dept B. So, fredetermined overhead rato - $50,000 10.000 howes - $5.00 So, the answers will be option (d) 2001 and $5.00 8. Overapplied manufacturing Overhead means (b) the applied manufactwring overhead cost was greater than the actual manufacturing overhead cost. % Ir a job-order acosting system, the application of manufactweing overhead would be recorded as a debit to - (e) wook inaproape (C) work-in-process inventorg.

$ Direct Material Direet Labour $27000 $ 34ore. (*) 6 1000 Pactory Overhead Indirect labour 10,000 Indirect material 15000 tax on manufacturing 2000 facility rent on factory 12000 44000 10500 + opening w-i-e 16000 12100 Closing weire 9000 Cost of goods manufactured 112000 . So the answer is option (1) 08 112000